Universal Health Services (UHS) 10-K risk factor changes: FY2016 vs FY2015

On a combined basis, these facilities contributed [added: 16% in 2016,] 17% in 2015 and 18% in [removed: both] 2014 [removed: and 2013] of our consolidated net revenues.

[added: On a] combined basis, after deducting an allocation for corporate overhead expense, these facilities generated [added: 7% in 2016,] 11% in [removed: 2015,] [added: 2015 and] 17% in 2014, [removed: and 15% in 2013] of our income from operations after net income attributable to noncontrolling interest.

Nevada: We own [removed: 6] [added: 7] inpatient acute care hospitals and 4 inpatient behavioral healthcare facilities as listed in Item 2.

On a combined basis, these facilities contributed [added: 16% in 2016,] 15% in [removed: 2015,] [added: 2015 and] 16% in 2014, [removed: and 15% in 2013] of our consolidated net revenues.

On a combined basis, after deducting an allocation for corporate overhead expense, these facilities generated [added: 13% in 2016,] 10% in [removed: 2015,] [added: 2015 and] 11% in 2014, [removed: and 6% in 2013] of our income from operations after net income attributable to noncontrolling interest.

On a combined basis, these facilities contributed 11% in [removed: 2015, 10%] [added: 2016, 11%] in [removed: 2014,] [added: 2015] and [removed: 9%] [added: 10%] in [removed: 2013] [added: 2014,] of our consolidated net revenues.

On a combined basis, after deducting an allocation for corporate overhead expense, these facilities generated [added: 15% in 2016,] 11% in [removed: 2015,] [added: 2015 and] 8% in 2014, [removed: and 4% in 2013] of our income from operations after net income attributable to noncontrolling interest.

[removed: If the] rates paid or the scope of services covered by governmental payors in the United States or United Kingdom are reduced, there could be a material adverse effect on our business, financial position and results of operations.

We receive Medicaid revenues in excess of [removed: $90] [added: $100] million annually from each of Texas, [added: California,] Washington, D.C., [removed: California,] Nevada, [removed: Illinois,] Pennsylvania, [removed: Virginia, Massachusetts] [added: Illinois, Virginia] and [removed: Florida,] [added: Massachusetts,] making us particularly sensitive to reductions in Medicaid and other state based revenue programs as well as regulatory, economic, environmental and competitive changes in those states.

While Congress had previously revised the intent requirement of the Anti-Kickback Statute to provide that a person is not required to “have actual knowledge or specific intent to commit a violation of” the Anti-Kickback Statute in order to be found in violation of such law, the Legislation also provides that any [added: claims for items or services that violate the Anti-Kickback Statute are also considered false claims for purposes of the federal civil False Claims Act.]

However, we also have substantial receivables due to us [removed: as of December 31, 2015 (a significant portion of which is past due)] from certain state-based funding [removed: programs, most particularly Illinois and Texas as discussed herein.][added: programs.]

Pursuant to HITECH regulations, hospitals that [removed: do] [added: did] not qualify as a meaningful user of EHR by 2015 [removed: are] [added: were] subject to a reduced market basket update to the inpatient prospective payment system (“IPPS”) standardized amount in 2015 and each subsequent fiscal year.

We believe that all of our acute care hospitals have met the applicable meaningful use criteria and therefore are not subject to a reduced market basked update to the IPPS standardized [removed: amount in federal fiscal year 2015.][added: amount.]

In the future, it is possible that different interpretations or enforcement of these laws and regulations could subject our current or past practices to allegations of impropriety or illegality or could require us to make changes in our facilities, equipment, [added: personnel, services, capital expenditure programs and operating expenses.]

The Foreign Corrupt Practices Act regulates U.S. companies in their dealings with foreign officials, prohibiting bribes and similar practices, and requires that they maintain records that fairly and accurately reflect transactions and appropriate [removed: internal accounting controls.]

We believe that all of our healthcare facilities are in material compliance with [removed: applicable federal, state, local and other relevant regulations and standards.]

Beginning in federal fiscal year 2015, hospitals that rank in the worst 25% of all hospitals nationally for hospital acquired conditions in the previous year [removed: will receive] [added: were subject to] reduced Medicare reimbursements.

[added: The ACA also] prohibits the use of federal funds under the Medicaid program to reimburse providers for treating certain provider-preventable conditions.

[removed: Our] [added: We, our] subsidiaries, PSI, and its subsidiaries, are subject to pending legal actions, governmental investigations and regulatory [removed: actions.][added: actions (see Item 3-Legal Proceedings).]

[removed: Our subsidiaries, PSI, and its subsidiaries,] [added: We] are subject to pending legal actions, [added: purported stockholder class actions,] governmental investigations and regulatory [removed: actions (see Item 3-Legal Proceedings).][added: actions.]

[removed: In addition, we] [added: We] are and may become subject to other loss contingencies, both known and unknown, which may relate to past, present and future facts, events, circumstances and occurrences.

Should an unfavorable outcome occur in some or all of our legal proceedings or other loss contingencies, or if successful claims and other actions are brought against us in the future, there could be a material adverse impact on our financial position, results of operations and [removed: liquidity following the merger and our ability to achieve expected benefits of the merger.][added: liquidity.]

In addition, as of December 31, [removed: 2015,] [added: 2016,] we had approximately [removed: $3.60] [added: $3.8] billion of goodwill recorded on our consolidated balance sheet.

At December 31, [removed: 2015, 24.1] [added: 2016, 21.8] million shares of Class B Common Stock were reserved for issuance upon conversion of shares of Class A, C and D Common Stock outstanding, for issuance upon exercise of options to purchase Class B Common Stock and for issuance of stock under other incentive plans.

As of March [removed: 26, 2015,] [added: 22, 2016,] the shares of Class A and Class C Common Stock constituted [removed: 7.3%] [added: 7.5%] of the aggregate outstanding shares of our Common Stock, had the right to elect five members of the Board of Directors and constituted [removed: 86.1%] [added: 86.4%] of our general voting power as of that date.

As of March [removed: 26, 2015,] [added: 22, 2016,] the shares of Class B and Class D Common Stock (excluding shares issuable upon exercise of options) constituted [removed: 92.7%] [added: 92.5%] of the outstanding shares of our Common Stock, had the right to elect two members of the Board of Directors and constituted [removed: 13.9%] [added: 13.6%] of our general voting power as of that date.

The Board of Directors, in its discretion, may require beneficial owners to provide satisfactory evidence that such owner holds [added: ten times as many shares of Class A or Class B Common Stock as Class C or Class D Common Stock, respectively, if such facts are not apparent from our stock records.]

If the

The Medicare DSH reductions began in October, 2013 while the Medicaid DSH reductions are scheduled to begin in 2018.

As discussed below, should the Legislation be repealed in its entirety, this aspect of the Legislation would also be repealed restoring physician ownership of hospitals and expansion right to its position and practice as it existed prior to the Legislation.

Initiatives to repeal the Legislation, in whole or in part, to delay elements of implementation or funding, and to offer amendments or supplements to modify its provisions have been persistent and may increase as a result of the 2016 election.

The ultimate outcomes of legislative attempts to repeal or amend the Legislation and legal challenges to the Legislation are unknown.

Results of recent Congressional elections and the change of Presidential administrations beginning in 2017 could create a political environment in which substantial portions of the Legislation are repealed or revised.

Specifically, President Donald Trump’s 100 Day Action Plan called for full repeal of the Legislation and its replacement with health savings accounts, cross-states sales of health insurance, and modifications to state-managed Medicaid programs.

Nevertheless, prospects for rapid enactment of radical change in the health care regulatory landscape are not clear, and President Donald Trump has already indicated that popular provisions of the Legislation should be preserved.

It remains unclear what portions of the Legislation may remain, or whether any replacement or alternative programs may be created by any future legislation.

Any such future repeal or replacement may have significant impact on the reimbursement for healthcare services generally, and may create reimbursement for services competing with the services offered by our hospitals.

Accordingly, there can be no assurance that the adoption of any future federal or state healthcare reform legislation will not have a negative financial impact on our hospitals, including their ability to compete with alternative healthcare services funded by such potential legislation, or for our hospitals to receive payment for services.

We also operate health care facilities in the United Kingdom where the National Health Service (the “NHS”) is the principal provider of healthcare services in the United Kingdom.

In addition to the NHS, we face competition in the United Kingdom from independent sector providers and other publicly funded entities for patients.

internal accounting controls.

Our operations in the United Kingdom are also subject to a high level of regulation relating to o registration and licensing requirements employee regulation, clinical standards, environmental rules as well as other areas.

We are also subject to a highly regulated business environment, and failure to comply with the various laws and regulations, applicable to us could lead to substantial penalties, and other adverse effects on our business.

applicable federal, state, local and other relevant regulations and standards.

Defending ourselves against the allegations in the lawsuits and governmental investigations, or similar matters and any related publicity, could potentially entail significant costs and could require significant attention from our management.

We are unable to predict the outcome of these matters or to reasonably estimate the amount or range of any such loss; however, these lawsuits could have a material adverse effect on our business, financial condition, results of operations and/or cash flows.

Legal uncertainty or a worsening of the economic conditions in the United Kingdom could materially affect our business and future results of operations.

On June 23, 2016, the United Kingdom affirmatively voted in a non-binding referendum in favor of the exit of the United Kingdom from the European Union (the “Brexit”) and it has been approved by vote of the British legislature.

Negotiations have commenced to determine the future terms of the United Kingdom’s relationship with the European Union, including the terms of trade between the United Kingdom and the European Union.

The effects of Brexit will depend on any agreements the United Kingdom makes to retain access to European Union markets either during a transitional period or more permanently.

Brexit could lead to legal and regulatory uncertainty as the United Kingdom determines which European Union laws to replace or replicate.

The announcement of Brexit also created (and the actual exit of the United Kingdom from the European Union may create future) economic uncertainty, both in the United Kingdom and globally.

The actual exit of the United Kingdom from the European Union could cause disruptions to and create uncertainty surrounding our business.

Any of these effects of Brexit (and the announcement thereof), and others we cannot anticipate, could harm our business, financial condition or results of operations.

On a

The Medicare DSH reductions began in October, 2013 with no material adverse impact to the reimbursements we receive expected until 2015 while Medicaid DSH reimbursements would not be adversely impacted until 2016.

There have been several attempts in Congress to repeal or modify various provisions of the Legislation.

We cannot predict whether or not any of these proposed changes to the PPACA will become law and therefore can provide no assurance that changes to the Legislation, as currently implemented, will not have a material adverse effect on our future results of operations.

claims for items or services that violate the Anti-Kickback Statute are also considered false claims for purposes of the federal civil False Claims Act.

We cannot predict the impact the Legislation may have on our business, results of operations, cash flow, capital resources and liquidity, or whether we will be able to successfully adapt to the changes required by the Legislation.

personnel, services, capital expenditure programs and operating expenses.

The ACA also

ten times as many shares of Class A or Class B Common Stock as Class C or Class D Common Stock, respectively, if such facts are not apparent from our stock records.

Our principal business is owning and operating, through our subsidiaries, acute care [removed: hospitals,] [added: hospitals and outpatient facilities and] behavioral health [removed: centers, surgical hospitals, ambulatory surgery centers and radiation oncology centers.][added: care facilities.]

As of February [removed: 25, 2016,] [added: 28, 2017,] we owned and/or operated [removed: 24 inpatient acute care hospitals, 3 free-standing emergency departments and 213] [added: 319] inpatient [added: facilities] and [removed: 16] [added: 33] outpatient [removed: behavioral health care] [added: and other] facilities [added: including the following] located in 37 states, Washington, D.C., the United Kingdom, Puerto Rico and the U.S. Virgin [removed: Islands.][added: Islands:]

[removed: In addition, we are building] [added: | | • |] a [removed: newly-constructed] [added: net other combined decrease of $8 million consisting primarily of the operating losses incurred at the newly constructed, 130-bed] acute care hospital located in Henderson, Nevada, that [removed: is scheduled to be] [added: was] completed and opened during the fourth quarter of 2016. [added: |]

As a percentage of our consolidated net revenues, net revenues from our acute care hospitals, [removed: surgical hospitals,] [added: outpatient facilities and] commercial health [removed: insurer, surgery centers and radiation oncology centers] [added: insurer] accounted for [added: 52% during 2016 and] 51% during each of 2015 and [removed: 2014 and 49% during 2013.][added: 2014.]

Net revenues from our behavioral health care [removed: operations] [added: facilities and commercial health insurer] accounted for [removed: 49%] [added: 48%] of our consolidated net revenues during [added: 2016 and 49% during] each of 2015 and [removed: 2014 and 51% during 2013.][added: 2014.]

Words such as “may,” “will,” “should,” “could,” “would,” “predicts,” “potential,” “continue,” “expects,” “anticipates,” “future,” “intends,” “plans,” “believes,” “estimates,” “appears,” [removed: “projects” and similar expressions, as well as statements in future tense, identify forward-looking statements.]

| | [removed: ·] [added: •] | our ability to comply with the existing laws and government regulations, and/or changes in laws and government regulations; |

| | [removed: ·] [added: •] | an increasing number of legislative initiatives have been passed into law that may result in major changes in the health care delivery system on a national or state level. No assurances can be given that the implementation of these laws will not have a material adverse effect on our business, financial condition or results of operations; |

| | [removed: ·] [added: •] | possible unfavorable changes in the levels and terms of reimbursement for our charges by third party payors or government based payors, including Medicare or Medicaid in the United States, and government based payors in the United Kingdom; |

| | [removed: ·] [added: •] | our ability to enter into managed care provider agreements on acceptable terms and the ability of our competitors to do the same, including contracts with United/Sierra Healthcare in Las Vegas, Nevada; |

| | [removed: ·] [added: •] | the outcome of known and unknown litigation, government investigations, false claim act allegations, and liabilities and other claims asserted against us and other matters as disclosed in Item 3. Legal Proceedings; |

| | [removed: ·] [added: •] | the potential unfavorable impact on our business of deterioration in national, regional and local economic and business conditions, including a worsening of unfavorable credit market conditions; |

| | [removed: ·] [added: •] | competition from other healthcare providers (including physician owned facilities) in certain markets; |

| | [removed: ·] [added: •] | technological and pharmaceutical improvements that increase the cost of providing, or reduce the demand for healthcare; |

| | [removed: ·] [added: •] | our ability to attract and retain qualified personnel, nurses, physicians and other healthcare professionals and the impact on our labor expenses resulting from a shortage of nurses and other healthcare professionals; |

| | [removed: ·] [added: •] | demographic changes; |

| | [removed: ·] [added: •] | our ability to successfully integrate and improve our recent acquisitions and the availability of suitable acquisitions and divestiture opportunities; |

| | [removed: ·] [added: •] | as discussed below in Sources of Revenue, we receive revenues from various state and county based programs, including Medicaid in all the states in which we [removed: operate,] [added: operate] (we receive Medicaid revenues in excess of [removed: $90] [added: $100] million annually from each of Texas, [added: California,] Washington, D.C., [removed: California,] Nevada, [removed: Illinois,] Pennsylvania, [removed: Virginia, Massachusetts] [added: Illinois, Virginia] and [removed: Florida);] [added: Massachusetts);] CMS-approved Medicaid supplemental programs in certain states including Texas, [added: Mississippi,] Illinois, Oklahoma, [removed: Mississippi, California, Ohio and] [added: Nevada,] Arkansas, [added: California and Indiana,] and; state Medicaid disproportionate share hospital payments in certain states including Texas and South Carolina. We are therefore particularly sensitive to potential reductions in Medicaid and other state based revenue programs as well as regulatory, economic, environmental and competitive changes in those states. We can provide no assurance that reductions to revenues earned pursuant to these programs, particularly in the above-mentioned states, will not have a material adverse effect on our future results of operations; |

| | [removed: ·] [added: •] | our ability to continue to obtain capital on acceptable terms, including borrowed funds, to fund the future growth of our business; |

| | [removed: ·] [added: •] | [removed: some of] our [added: inpatient] acute care [added: and behavioral health care] facilities [added: may] experience decreasing [removed: inpatient] admission [added: and length of stay] trends; |

| | [removed: ·] [added: •] | our financial statements reflect large amounts due from various commercial and private payors and there can be no assurance that failure of the payors to remit amounts due to us will not have a material adverse effect on our future results of operations; |

| | [removed: ·] [added: •] | in March, 2010, the Health Care and Education Reconciliation Act of 2010 and the Patient Protection and Affordable Care Act [added: (the “ACA”)] were enacted into law and created significant changes to health insurance coverage for U.S. citizens as well as material revisions to the federal Medicare and state Medicaid programs. The two combined primary goals of these acts are to provide for increased access to coverage for healthcare and to reduce healthcare-related expenses. Medicare, Medicaid and other health care industry changes are scheduled to be implemented at various times during this decade. [removed: We cannot predict the effect, if any, these enactments will have on our future results of operations;] |

| | [removed: ·] [added: •] | the Department of Health and Human Services (“HHS”) published final regulations in July, 2010 implementing the health information technology (“HIT”) provisions of the American Recovery and Reinvestment Act (referred to as the “HITECH Act”). The final regulation defines the “meaningful use” of Electronic Health Records (“EHR”) and establishes the requirements for the Medicare and Medicaid EHR payment incentive programs. The implementation period for these new Medicare and Medicaid incentive payments started in federal fiscal year 2011 and can end as late as 2016 for Medicare and 2021 for the state Medicaid programs. Hospitals that do not qualify as a meaningful user of EHR by 2015 are subject to a reduced market basket update to the inpatient prospective payment system (“IPPS”) standardized amount in 2015 and each subsequent fiscal year. We believe that all of our acute care hospitals have met the applicable meaningful use criteria and therefore were not subject to a reduced market basked update to the IPPS standardized amount in federal fiscal year 2015. However, under the HITECH Act, hospitals must continue to meet the applicable meaningful use criteria in each fiscal year or they will be subject to a market basket update reduction in a subsequent fiscal year. Failure of our acute care hospitals to continue to meet the applicable meaningful use criteria would have an adverse effect on our future net revenues and results of [removed: operations. There will likely be timing differences in the recognition of the incentive income and expenses recorded in connection with the implementation of the EHR applications which may cause material period-to-period changes in our future results of] operations; |

| | [removed: ·] [added: •] | in August, 2011, the Budget Control Act of 2011 (the “2011 Act”) was enacted into law. The 2011 Act imposed annual spending limits for most federal agencies and programs aimed at reducing budget deficits by $917 billion between 2012 and 2021, according to a report released by the Congressional Budget Office. Among its other provisions, the law established a bipartisan Congressional committee, known as the Joint Select Committee on Deficit Reduction (the “Joint Committee”), which was tasked with making recommendations aimed at reducing future federal budget deficits by an additional $1.5 trillion over 10 years. The Joint Committee was unable to reach an agreement by the November 23, 2011 deadline and, as a result, across-the-board cuts to discretionary, national defense and Medicare spending were implemented on March 1, 2013 resulting in Medicare payment reductions of up to 2% per fiscal year (annual reduction of approximately $36 million to our Medicare net revenues) with a uniform percentage reduction across all Medicare programs. The Bipartisan Budget Act of 2015, enacted on November 2, 2015, continued the 2% reductions to Medicare reimbursement imposed under the 2011 Act. We cannot predict whether Congress will restructure the implemented Medicare payment reductions or what other federal budget deficit reduction initiatives may be proposed by Congress going forward; |

| | [removed: ·] [added: •] | uninsured and self-pay patients treated at our acute care facilities unfavorably impact our ability to satisfactorily and timely collect our self-pay patient accounts; |

| | [removed: ·] [added: •] | changes in our business strategies or development plans; |

| | [removed: ·] [added: •] | fluctuations in the value of our common stock, and; |

| | [removed: ·] [added: •] | other factors referenced herein or in our other filings with the Securities and Exchange Commission. |

Medicare and Medicaid revenues represented [removed: 35%] [added: 32%] of our net patient revenues during [removed: 2015, 38%] [added: 2016, 34%] during [removed: 2014] [added: 2015] and [removed: 39%] [added: 38%] during [removed: 2013.][added: 2014.]

Revenues from managed care entities, including health maintenance organizations and managed Medicare and Medicaid programs accounted for [removed: 52%] [added: 56%] of our net patient revenues during [removed: 2015, 50%] [added: 2016, 54%] during [removed: 2014] [added: 2015] and [removed: 49%] [added: 52%] during [removed: 2013.][added: 2014.]

Adjustments related to the final settlement of these retrospectively determined amounts did not materially impact our results in [removed: 2015, 2014 and 2013.][added: 2016, 2015 or 2014.]

If it were to occur, each 1% adjustment to our estimated net Medicare revenues that are subject to retrospective review and settlement as of December 31, [removed: 2015,] [added: 2016,] would change our after-tax net income by approximately $1 million.

[removed: Patients] [added: Generally, patients] treated at our hospitals for non-elective services, who have gross income less than 400% of the federal poverty guidelines, are deemed eligible for charity care.

[added: Certain patients may be classified as Medicaid pending at] registration based upon a screening evaluation if we are unable to definitively determine if they are currently Medicaid eligible.

Although the patient’s ultimate eligibility determination may result in amounts being reclassified among these accounts from period to period, these reclassifications did not have a material impact on our results of operations in [removed: 2015, 2014] [added: 2016, 2015] or [removed: 2013] [added: 2014] since our facilities make estimates at each financial reporting period to reserve for amounts that are deemed to be uncollectible.

Our accounts receivable are recorded net of allowance for doubtful accounts of [removed: $399] [added: $410] million and [removed: $325] [added: $399] million at December 31, [removed: 2015] [added: 2016] and [removed: 2014,] [added: 2015,] respectively.

Approximately 85% during [removed: 2015] [added: each of 2016] and [removed: 84% during 2014] [added: 2015] of our consolidated provision for doubtful accounts, was incurred by our acute care hospitals.

Shown below is our payer mix concentrations and related aging of our billed accounts receivable, net of contractual allowances, for our acute care hospitals as of December 31, [removed: 2015] [added: 2016] and [removed: 2014:][added: 2015:]

The implementation period for these new Medicare and Medicaid incentive payments started in federal fiscal year 2011 and [removed: can end] [added: ended] as late as 2016 for Medicare and [added: can end as late as] 2021 for the state Medicaid programs.

We recognize income related to Medicare and Medicaid incentive payments using a gain contingency model that is based upon when our eligible hospitals have demonstrated “meaningful use” of certified EHR technology [removed: for the applicable period and the cost report information for the full cost report year that will determine the final calculation of the incentive payment is available.]

Acute care facilities located in the U.S.:

| | • | 26 inpatient acute care hospitals; |

| | • | 4 free-standing emergency departments, and; |

| | • | 4 outpatient surgery/cancer care centers & 1 surgical hospital. |

Behavioral health care facilities (293 inpatient facilities and 24 outpatient facilities):

Located in the U.S.:

| | • | 189 inpatient behavioral health care facilities, and; |

| | • | 20 outpatient behavioral health care facilities. |

Located in the U.K.:

| | • | 100 inpatient behavioral health care facilities, and; |

| | • | 2 outpatient behavioral health care facilities. |

Located in Puerto Rico and the U.S. Virgin Islands:

| | • | 4 inpatient behavioral health care facilities, and; |

| | • | 2 outpatient behavioral health care facility. |

In late December, 2016, we completed the acquisition of Cambian Group, PLC’s adult services’ division (the “Cambian Adult Services”) for a total purchase price of approximately $473 million.

The Cambian Adult Services division consists of 79 inpatient and 2 outpatient behavioral health facilities located in the U.K. The Competition and Markets Authority (“CMA”) in the U.K. is currently reviewing our acquisition of the Cambian Adult Services.

We estimate that the CMA’s review of our acquisition will be completed during the second quarter of 2017.

However, until such review is completed, we are not permitted to integrate the Cambian Adult Services business into our existing businesses located in the U.K. Further, we can provide no assurance that the CMA will not require us to divest certain parts of the Cambian Adults Services division or certain parts of our existing business located in the U.K.

“projects” and similar expressions, as well as statements in future tense, identify forward-looking statements.

| | | Initiatives to repeal the ACA, in whole or in part, to delay elements of implementation or funding, and to offer amendments or supplements to modify its provisions, have been persistent and may increase as a result of the 2016 election. The ultimate outcomes of legislative attempts to repeal or amend the ACA and legal challenges to the ACA are unknown. Results of recent Congressional elections and the change of Presidential administrations beginning in 2017 could create a political environment in which substantial portions of the ACA are repealed or revised. Specifically, President Donald Trump’s 100 Day Action Plan called for full repeal of the ACA and its replacement with health savings accounts, cross-states sales of health insurance, and modifications to state-managed Medicaid programs. Nevertheless, prospects for rapid enactment of radical change in the health care regulatory landscape are not clear, and President Donald Trump has already indicated that popular provisions of the ACA should be preserved. It remains unclear what portions of the ACA may remain, or what any replacement or alternative programs may be created by any future legislation. Any such future repeal or replacement may have significant impact on the reimbursement for healthcare services generally, and may create reimbursement for services competing with the services offered by our hospitals. Accordingly, there can be no assurance that the adoption of any future federal or state healthcare reform legislation will not have a negative financial impact on our hospitals, including their ability to compete with alternative healthcare services funded by such potential legislation, or for our facilities to receive payment for services; |

Generally, patients treated at our hospitals for non-elective services, who have gross income less than 400% of the federal

poverty guidelines, are deemed eligible for charity care.

Effective January 1, 2016, our hospitals in certain states in which we operate reduced the charity care eligibility threshold to less than the federal poverty guidelines.

As of December 31, 2016:

| Medicare | | $ | 71,213 | | | $ | 4,519 | | | $ | 1,385 | | | $ | 4,225 | |

| Medicaid | | | 15,659 | | | | 6,654 | | | | 4,256 | | | | 8,966 | |

| Commercial insurance and other | | | 336,346 | | | | 117,919 | | | | 62,806 | | | | 164,143 | |

| Private pay | | | 114,382 | | | | 67,316 | | | | 16,689 | | | | 26,881 | |

| Total | | $ | 537,600 | | | $ | 196,408 | | | $ | 85,136 | | | $ | 204,215 | |

for the applicable period and the cost report information for the full cost report year that will determine the final calculation of the incentive payment is available.

Net revenues increased 8% or $723 million to $9.77 billion during 2016 as compared to $9.04 billion during 2015.

| | • | other combined net increase of $181 million consisting primarily of the revenues generated at 4 behavioral health care hospitals acquired in the U.K. in connection with our acquisition of Alpha Hospital Holdings Limited (“Alpha”) during the third quarter of 2015, and 4 inpatient facilities and 8 outpatient centers acquired during the fourth quarter of 2015 as result of our acquisition of Foundations Recovery Network, LLC (“Foundations”). |

| | a. | an increase of $30 million as discussed below in Acute Care Hospital Services; |

| | b. | an increase of $9 million as discussed below in Behavioral Health Services; |

| | c. | a decrease of $12 million resulting from an increase in interest expense due primarily to increased aggregate average outstanding borrowings, and; |

| | • | an increase of $26 million resulting from a decrease in the income attributable to noncontrolling interests which was due primarily to our May, 2016, purchase of the minority ownership interests held by a third-party in six acute care hospitals located in Las Vegas, Nevada, and; |

To obtain a complete understanding of our financial performance, the Same Facility results should be examined in connection with our net income as determined in accordance with GAAP and as presented in the condensed consolidated financial statements and notes thereto as contained in this Annual Report on Form 10-K.

| | | December 31, 2016 | | | | | | | | December 31, 2015 | | | | | | |

| Less: Provision for doubtful accounts | | | 625,170 | | | | | | | | 631,013 | | | | | |

| Net revenues | | | 4,986,668 | | | | 100.0 | % | | | 4,556,664 | | | | 100.0 | % |

We also manage and/or own outright or in partnerships with physicians, 4 surgical hospitals and surgery and radiation oncology centers located in 4 states.

| --- | --- | --- |

| | · | our accounts receivable as of December 31, 2015 and December 31, 2014 include amounts due from Illinois of approximately $28 million and $44 million, respectively. Collection of the outstanding receivables continues to be delayed due to state budgetary and funding pressures. Approximately $12 million as of December 31, 2015 and $23 million as of December 31, 2014, of the receivables due from Illinois were outstanding in excess of 60 days, as of each respective date. In addition, our accounts receivable as of December 31, 2015 and December 31, 2014 includes approximately $80 million and $102 million, respectively, due from Texas in connection with Medicaid supplemental payment programs. The $80 million due from Texas as of December 31, 2015 consists of $47 million related to uncompensated care program revenues, $9 million related to disproportionate share hospital program revenues and $24 million related to Delivery Service Reform Incentive Payment program (“DSRIP”) revenues. The above-mentioned Texas DSRIP receivables outstanding as of December 31, 2015 were collected in January, 2016. Although the accounts receivable due from Illinois and Texas could remain outstanding for the foreseeable future, since we expect to eventually collect all amounts due to us, no related reserves have been established in our consolidated financial statements. However, we can provide no assurance that we will eventually collect all amounts due to us from Illinois and/or Texas. Failure to ultimately collect all outstanding amounts due from these states would have an adverse impact on our future consolidated results of operations and cash flows; |

| | · | there have been several attempts in Congress to repeal or modify various provisions of the Patient Protection and Affordable Care Act (the “PPACA”). We cannot predict whether or not any of these proposed changes to the PPACA will become law and therefore can provide no assurance that changes to the PPACA, as currently implemented, will not have a material adverse effect on our future results of operations; |

| | · | the ability to obtain adequate levels of general and professional liability insurance on current terms; |

Certain patients may be classified as Medicaid pending at

Effective January 1, 2014, in response to market conditions and other considerations, we modified our uninsured discount policy and increased the discount to 60% of gross charges from 30% previously.

Since we expect to collect only a small portion of amounts due from our uninsured patients, the increase in the uninsured discount as of January 1, 2014 had no material impact on our 2015 and 2014 net revenues, net income attributable to UHS or net accounts receivable, as compared to 2013.

However, this change resulted in an increase in uninsured discounts and a decrease in the provision for doubtful accounts.

As of December 31, 2014:

| Medicare | | $ | 65,854 | | | $ | 3,988 | | | $ | 1,780 | | | $ | 9,138 | |

| Medicaid | | | 11,049 | | | | 7,226 | | | | 4,306 | | | | 11,354 | |

| Commercial insurance and other | | | 283,565 | | | | 96,973 | | | | 46,344 | | | | 111,875 | |

| Private pay | | | 81,376 | | | | 48,112 | | | | 8,642 | | | | 17,788 | |

| Total | | $ | 441,844 | | | $ | 156,299 | | | $ | 61,072 | | | $ | 150,155 | |

recognize Medicare EHR incentive income for each hospital during the fourth quarter of the year in which the facility meets the “meaningful use” criteria and during the fourth quarter of each applicable subsequent year.

Upon meeting subsequent fiscal year “meaningful use” criteria, our hospitals may become entitled to additional Medicaid EHR incentive payments which will be recognized as incentive income in future periods.

Medicaid EHR incentive payments received prior to our hospitals meeting the “meaningful use” criteria were included in other current liabilities (as deferred EHR incentive income) in our consolidated balance sheet.

In connection with this change, we first performed an impairment test as of September 1, 2015, which indicated no impairment of goodwill or indefinite-lived intangible assets.

Net revenues increased 11% or $837 million to $8.21 billion during 2014 as compared to $7.37 billion during 2013.

| | · | other combined net increase of $280 million consisting primarily of the net revenues generated during 2014 related to acquisitions made during the year including: (i) a commercial health insurer headquartered in Reno, Nevada; (ii) the behavioral health facilities located in the U.K. acquired as part of our acquisition of Cygnet Health Care Limited, and; (iii) a 124-bed behavioral health care facility and outpatient treatment center located in Washington, D.C. Also contributing to the increase in net revenues was a full year of net revenues generated during 2014 at Temecula Valley Hospital, a 140-bed, newly constructed acute care facility that was completed and opened during the fourth quarter of 2013. |

| | c. | a net decrease of $61 million resulting from the change in the reductions to our professional and general liability self-insurance reserves recorded during 2014 and 2013 based upon reserve analyses, as discussed in Note 8 to the Consolidated Financial Statements-Commitments and Contingencies ($20 million reduction recorded during 2014 of which $11 million was applicable to our acute care hospitals and $9 million was applicable to our behavioral health care |

| | | facilities, as compared to an $81 million reduction recorded during 2013 of which $63 million was applicable to our acute care hospitals and $18 million was applicable to our behavioral health care facilities); |

| | d. | a decrease of $48 million resulting from a charge incurred in connection with the settlement of the Garden City Employees’ Retirement System v. Psychiatric Solutions, Inc. legal matter; |

| | e. | a decrease of $36 million recorded during the third quarter of 2014 in connection with the costs related to extinguishment of debt resulting from various financing transactions that occurred at that time; |

| | g. | an increase of $10 million due to the pre-tax gain realized during 2014 resulting from the divestiture of a non-operating investment, and; |

| | · | a decrease of $9 million resulting from an increase in the provision for income taxes resulting primarily from: (i) the income tax provision on the $44 million increase in pre-tax income ($60 million increase in income before income taxes less the $16 million decrease in income resulting from an increase in the income attributable to noncontrolling interests), partially offset by; (ii) the income tax provision recorded during 2013 on the sale of Peak Behavioral Health Services (the tax basis gain realized on the sale in 2013 exceeded the gain recorded pursuant to generally accepted accounting principles), and; (iii) a decrease during 2014, as compared to 2013, to our blended effective state income tax rate. |

| | · | a net decrease of $11 million resulting from a reduction recorded during 2014 to our professional and general liability self-insurance reserves attributable to our acute care hospitals; |

The decrease in the provision for doubtful accounts during 2014, as compared to 2013, was primarily due to the increase in the uninsured discount (effective January 1, 2014, as discussed above in Charity Care, Uninsured discounts and Provision for Doubtful Accounts), and reclassifications among provision for doubtful accounts and other accounts such as Medicaid pending based upon our patients’ ultimate eligibility determination, as discussed above.

| | | December 31, 2014 | | | | | | | | December 31, 2013 | | | | | | |

| Less: Provision for doubtful accounts | | | 582,986 | | | | | | | | 1,014,455 | | | | | |

| Net revenues | | | 3,921,901 | | | | 100.0 | % | | | 3,566,825 | | | | 100.0 | % |

| Salaries, wages and benefits | | | 1,684,286 | | | | 42.9 | % | | | 1,614,276 | | | | 45.3 | % |

| Other operating expenses | | | 799,805 | | | | 20.4 | % | | | 781,812 | | | | 21.9 | % |

| Supplies expense | | | 698,860 | | | | 17.8 | % | | | 641,078 | | | | 18.0 | % |

| Depreciation and amortization | | | 200,617 | | | | 5.1 | % | | | 191,274 | | | | 5.4 | % |

| Lease and rental expense | | | 50,367 | | | | 1.3 | % | | | 57,384 | | | | 1.6 | % |

| Subtotal-operating expenses | | | 3,433,935 | | | | 87.6 | % | | | 3,285,824 | | | | 92.1 | % |

| Income from operations | | | 487,966 | | | | 12.4 | % | | | 281,001 | | | | 7.9 | % |

| Income before income taxes | | | 483,661 | | | | 12.3 | % | | | 276,500 | | | | 7.8 | % |

We performed periodic assessments of the cash flow hedge instruments during [removed: 2015] [added: 2016] and [removed: 2014] [added: 2015] and determined the hedges to be highly effective.

[removed: ·Four] [added: - Four] forward starting interest rate swaps, entered into during the second quarter of 2015, whereby we pay a fixed rate on a total notional amount of $500 million and receive one-month LIBOR.

[removed: ·Four] [added: - Four] forward starting interest rate swaps, entered into during the third quarter of 2015, whereby we pay a fixed rate on a total notional amount of $400 million and receive one-month LIBOR.

One swap on a notional amount of $100 million became effective on July 15, 2015, two swaps on a total notional amount of $200 million became effective on September 15, 2015 and another swap on a notional amount of $100 million became effective on [added: December 15, 2015.]

[removed: ·One] [added: - One] interest rate swap, entered into during the fourth quarter of 2015, whereby we pay a fixed rate on a total notional amount of $100 million and receive one-month LIBOR.

At December 31, [removed: 2015,] [added: 2016,] the fair value of our interest rate swaps was [added: de minimis on] a net [removed: liability of $1 million] [added: basis] comprised of a [removed: $5] [added: $4] million asset which is included in other assets offset by a [removed: $6] [added: $4] million liability which [removed: is] [added: in] included in other current liabilities on the accompanying [added: consolidated] balance sheet.

At December 31, [removed: 2014,] [added: 2015,] the fair value of our interest rate swaps was a [added: net] liability of [removed: $6 million, all] [added: $1 million comprised] of [added: a $5 million asset] which is included in other [added: assets offset by a $6 million liability which is included in other] current liabilities.

The table below presents information about our long-term financial instruments that are sensitive to changes in interest rates as of December 31, [removed: 2015.][added: 2016.]

| | | [removed: 2016 | | | |] 2017 | | | | 2018 | | | | 2019 | | | | 2020 | | | | [added: 2021 | | | |] Thereafter | | | | Total | | |

| Average interest rates | | | [removed: 4.40] [added: 2.2] | % | | | [removed: 4.40] [added: 2.2] | % | | | [removed: 4.40] [added: 2.2] | % | | | [removed: 4.40] | [removed: %] | | | [removed: 5.00] | [removed: %] | | | [removed: 5.00] | [removed: %] | | | [removed: 4.60] [added: 2.2] | % |

| Average interest rates | | | [removed: 1.60] | [removed: %] | | | [removed: 1.80] | [removed: %] | | | [removed: 1.70] [added: 1.3] | % | | | [removed: 1.80] | [removed: %] | | | | | | | | | | | [removed: 1.80] [added: 1.3] | % |

| Notional amount | | | | | | | | | | [added: $] | [added: 1,000,000] | | | [removed: $] | [removed: 1,000,000] | | | | | | | | | | | $ | 1,000,000 | |

As calculated based upon our variable rate debt outstanding as of December 31, [removed: 2015] [added: 2016] that is subject to interest rate fluctuations, each 1% change in interest rates would impact our pre-tax income by approximately [removed: $18] [added: $17] million.

| Debt | | $ | 2,445 | | | $ | 2,646 | | | $ | 298,991 | | | $ | 1,650 | | | $ | 1,696 | | | $ | 1,104,961 | | | $ | 1,412,389 | |

| Average interest rates | | | 4.7 | % | | | 4.7 | % | | | 4.7 | % | | | 5.0 | % | | | 5.0 | % | | | 5.1 | % | | | 4.9 | % |

| Debt | | $ | 103,450 | | | $ | 487,082 | | | $ | 2,133,204 | | | | | | | | | | | | | | | $ | 2,723,736 | |

December 15, 2015.

| Debt | | $ | 2,354 | | | $ | 2,505 | | | $ | 2,764 | | | $ | 301,988 | | | $ | 1,650 | | | $ | 315,920 | | | $ | 627,181 | |

| Debt | | $ | 60,368 | | | $ | 88,749 | | | $ | 488,750 | | | $ | 2,184,977 | | | | | | | | | | | $ | 2,822,844 | |

| Average interest rates | | | | | | | | | | | | | | | 1.31 | % | | | | | | | | | | | 1.31 | % |

Our principal business is owning and operating, through our subsidiaries, acute care [removed: hospitals,] [added: hospitals and outpatient facilities and] behavioral health [removed: centers, surgical hospitals, ambulatory surgery centers and radiation oncology centers.][added: care facilities.]

As of February [removed: 25, 2016,] [added: 28, 2017,] we owned and/or operated [removed: 24 inpatient acute care hospitals, 3 free-standing emergency departments and 213] [added: 319] inpatient [added: facilities] and [removed: 16] [added: 33] outpatient [removed: behavioral health care] [added: and other] facilities [added: including the following] located in 37 states, Washington, D.C., the United Kingdom, Puerto Rico and the U.S. Virgin [removed: Islands.][added: Islands:]

As a percentage of our consolidated net revenues, net revenues from our acute care hospitals, [removed: surgical hospitals,] [added: outpatient facilities and] commercial health [removed: insurer, surgery centers and radiation oncology centers] [added: insurer] accounted for [added: 52% during 2016 and] 51% during each of 2015 and [removed: 2014 and 49% during 2013.][added: 2014.]

Net revenues from our behavioral health care [removed: operations] [added: facilities and commercial health insurer] accounted for [removed: 49%] [added: 48%] of our consolidated net revenues during [added: 2016 and 49% during] each of 2015 and [removed: 2014 and 51% during 2013.][added: 2014.]

[removed: 2015] [added: 2016] Acquisitions of Assets and Businesses:

During [removed: 2015] [added: 2016] we spent [removed: $534] [added: $614] million to:

| | [removed: ·] [added: •] | acquire [added: Desert View Hospital,] a [removed: 46-bed behavioral health] [added: 25-bed acute] care facility located in [removed: the U.K.] [added: Pahrump, Nevada] (acquired during the [removed: first quarter);] [added: third quarter), and;] |

| | [removed: ·] [added: •] | [added: acquire] various other [removed: businesses, a management contract] [added: businesses] and real property assets. |

In accordance with Section 303A.12(a) of the New York Stock Exchange Listed Company Manual, we submitted our CEO’s certification to the New York Stock Exchange in [removed: 2015.][added: 2016.]

| | [removed: ·] [added: •] | service excellence |

| | [removed: ·] [added: •] | continuous improvement in measurable ways |

| | [removed: ·] [added: •] | employee development |

| | [removed: ·] [added: •] | ethical and fair treatment of all |

| | [removed: ·] [added: •] | teamwork |

| | [removed: ·] [added: •] | compassion |

| | [removed: ·] [added: •] | innovation in service delivery |

[removed: In addition, in response to cost] containment pressures, we continue to implement programs at our facilities designed to improve financial performance and efficiency while continuing to provide quality care, including more efficient use of professional and paraprofessional staff, monitoring and adjusting staffing levels and equipment usage, improving patient management and reporting procedures and implementing more efficient billing and collection procedures.

Current industry trends in utilization and occupancy have been significantly affected by changes in reimbursement policies of third [added: party payors.]

| | | [removed: 2015] [added: 2016] | | | | [removed: 2014] [added: 2015] | | | | [removed: 2013] [added: 2014] | | | | [removed: 2012] [added: 2013] | | | | [removed: 2011] [added: 2012] | | |

| Acute Care Hospitals | | | [removed: 5,832] [added: 5,934] | | | | [removed: 5,776] [added: 5,832] | | | | [removed: 5,652] [added: 5,776] | | | | [removed: 5,682] [added: 5,652] | | | | [removed: 5,726] [added: 5,682] | |

| Behavioral Health Centers | | | [removed: 21,202] [added: 21,829] | | | | [removed: 20,231] [added: 21,202] | | | | [removed: 19,975] [added: 20,231] | | | | [removed: 19,362] [added: 19,975] | | | | [removed: 19,280] [added: 19,362] | |

| Acute Care Hospitals | | | [removed: 5,656] [added: 5,759] | | | | [removed: 5,571] [added: 5,656] | | | | [removed: 5,429] [added: 5,571] | | | | [removed: 5,457] [added: 5,429] | | | | [removed: 5,424] [added: 5,457] | |

| Behavioral Health Centers | | | [removed: 21,116] [added: 21,744] | | | | [removed: 20,131] [added: 21,116] | | | | [removed: 19,876] [added: 20,131] | | | | [removed: 19,282] [added: 19,876] | | | | [removed: 19,262] [added: 19,282] | |

| Acute Care Hospitals | | | [removed: 261,727] [added: 274,074] | | | | [removed: 251,165] [added: 261,727] | | | | [removed: 246,160] [added: 251,165] | | | | [removed: 251,099] [added: 246,160] | | | | [removed: 258,754] [added: 251,099] | |

| Behavioral Health Centers | | | [removed: 447,007] [added: 456,052] | | | | [removed: 426,510] [added: 447,007] | | | | [removed: 402,088] [added: 426,510] | | | | [removed: 374,865] [added: 402,088] | | | | [removed: 352,208] [added: 374,865] | |

| Acute Care Hospitals | | | [removed: 4.7] [added: 4.6] | | | | [removed: 4.6] [added: 4.7] | | | | [removed: 4.5] [added: 4.6] | | | | 4.5 | | | | [removed: 4.4] [added: 4.5] | |

| Behavioral Health Centers | | | [removed: 13.1] [added: 13.2] | | | | [removed: 12.9] [added: 13.1] | | | | [removed: 13.3] [added: 12.9] | | | | [removed: 14.0] [added: 13.3] | | | | [removed: 14.6] [added: 14.0] | |

| Acute Care Hospitals (1) | | | [removed: 1,218,991] [added: 1,251,511] | | | | [removed: 1,167,726] [added: 1,218,991] | | | | [removed: 1,112,541] [added: 1,167,726] | | | | [removed: 1,122,557] [added: 1,112,541] | | | | [removed: 1,151,183] [added: 1,122,557] | |

| Behavioral Health Centers | | | [removed: 5,835,134] [added: 6,004,066] | | | | [removed: 5,518,660] [added: 5,835,134] | | | | [removed: 5,365,734] [added: 5,518,660] | | | | [removed: 5,245,499] [added: 5,365,734] | | | | [removed: 5,157,454] [added: 5,245,499] | |

| Acute Care Hospitals | | | [removed: 57] [added: 58] | % | | | [removed: 55] [added: 57] | % | | | [removed: 54] [added: 55] | % | | | 54 | % | | | [removed: 55] [added: 54] | % |

| Behavioral Health Centers | | | 75 | % | | | 75 | % | | | [removed: 74] [added: 75] | % | | | 74 | % | | | [removed: 73] [added: 74] | % |

| Acute Care Hospitals | | | 59 | % | | | [removed: 57] [added: 59] | % | | | [removed: 56] [added: 57] | % | | | 56 | % | | | [removed: 58] [added: 56] | % |

| Behavioral Health Centers | | | [removed: 76] [added: 75] | % | | | [removed: 75] [added: 76] | % | | | [removed: 74] [added: 75] | % | | | [removed: 75] [added: 74] | % | | | [removed: 73] [added: 75] | % |

Licensing, Certification and Accreditation: All of our [added: U.S.] hospitals are subject to compliance with various federal, state and local statutes and regulations [added: in the U.S.] and receive periodic inspection by state licensing agencies to review standards of medical care, equipment and cleanliness.

All of our acute care hospitals and most of our behavioral health centers [added: in the U.S.] are certified as providers of Medicare and Medicaid services by the appropriate governmental authorities.

[removed: The law and regulations require Peer Review] Organizations (“PROs”) to review the appropriateness of Medicare and Medicaid patient admissions and discharges, the quality of care provided, the validity of diagnosis related group (“DRG”) classifications and the appropriateness of cases of extraordinary length of stay.

When a defendant is determined by a court of law to have violated the False Claims Act, the defendant may be liable for up to three times the actual damages sustained by the government, plus mandatory civil penalties of between [removed: $5,500] [added: $10,781] to [removed: $11,000] [added: $21,563] for each separate false claim.

HIPAA Administrative Simplification and Privacy Requirements: The administrative simplification provisions of HIPAA, as amended by the Health Information Technology for Economic and Clinical Health Act (“HITECH”), require the use of uniform [removed: electronic data transmission standards for health care claims and payment transactions submitted or received electronically.]

Although we believe our policies, procedures and practices comply with governmental regulations, no assurance can be given that we will not be subjected to inquiries or actions, or that we will not be faced with sanctions, fines or penalties in connection with the [added: investigations.]

[removed: Financial arrangements with] physicians and other referral sources, including compliance with anti-kickback and Stark laws and emergency department treatment and transfer requirements are also the focus of policy and training, standardized documentation requirements, and review and audit.

Acute care facilities located in the U.S.:

| | • | 26 inpatient acute care hospitals; |

| | • | 4 free-standing emergency departments, and; |

| | • | 4 outpatient surgery/cancer care centers & 1 surgical hospital. |

Behavioral health care facilities (293 inpatient facilities and 24 outpatient facilities):

Located in the U.S.:

| | • | 189 inpatient behavioral health care facilities, and; |

| | • | 20 outpatient behavioral health care facilities. |

Located in the U.K.:

| | • | 100 inpatient behavioral health care facilities, and; |

| | • | 2 outpatient behavioral health care facilities. |

Located in Puerto Rico and the U.S. Virgin Islands:

| | • | 4 inpatient behavioral health care facilities, and; |

| | • | 2 outpatient behavioral health care facility. |

In late December, 2016, we completed the acquisition of Cambian Group, PLC’s adult services’ division (the “Cambian Adult Services”) for a total purchase price of approximately $473 million.

The Cambian Adult Services division consists of 79 inpatient and 2 outpatient behavioral health facilities located in the U.K. The Competition and Markets Authority (“CMA”) in the U.K. is currently reviewing our acquisition of the Cambian Adult Services.

We estimate that the CMA’s review of our acquisition will be completed during the second quarter of 2017.

However, until such review is completed, we are not permitted to integrate the Cambian Adult Services business into our existing businesses located in the U.K. Further, we can provide no assurance that the CMA will not require us to divest certain parts of the Cambian Adults Services division or certain parts of our existing business located in the U.K.

| | • | acquire the adult services division of Cambian Group, PLC consisting of 79 inpatient and 2 outpatient behavioral health facilities located in the U.K. (acquired late in the fourth quarter); |

| --- | --- | --- |

| --- | --- | --- |

| --- | --- | --- |

| --- | --- | --- |

| --- | --- | --- |

| --- | --- | --- |

| --- | --- | --- |

In addition, in response to cost

Our facilities in the United Kingdom are also subject to various laws and regulations.

The law and regulations require Peer Review

electronic data transmission standards for health care claims and payment transactions submitted or received electronically.

Financial arrangements with

United Kingdom Regulation: Our operations in the United Kingdom are also subject to a high level of regulation relating to registration and licensing requirements, employee regulation, clinical standards, environmental rules as well as other areas.

We are also subject to a highly regulated business environment, and failure to comply with the various laws and regulations applicable to us could lead to substantial penalties and other adverse effects on our business.

Our acute care and behavioral health care facilities are

In June, 2016, we provided the required notice to the Trust, exercising the 5-year renewal options on McAllen Medical Center, Wellington Regional Medical Center and Southwest Healthcare System, Inland Valley Campus.

The renewals extend the lease terms on these facilities, at existing lease rates, through December, 2021.

| --- | --- | --- |

See Note 9 to the Consolidated Financial Statements-Relationship with Universal Health Realty

He has also served as Secretary since 1999.

Mr. Pember was elected Executive Vice President in 2017 and continues to serve as President of our Acute Care Division since commencement of his employment with us in 2011.

In addition, we are building a newly-constructed acute care hospital located in Henderson, Nevada, that is scheduled to be completed and opened during the fourth quarter of 2016.

We also manage and/or own outright or in partnerships with physicians, 4 surgical hospitals and surgery and radiation oncology centers located in 4 states.

| | · | acquire Alpha Hospitals Holdings Limited consisting of four behavioral health care hospitals with 305 beds located in the U.K. (acquired during the third quarter); |

| | · | acquire Foundations Recovery Network, LLC consisting of 4 inpatient facilities (322 beds) as well as 8 outpatient centers (during the fourth quarter), and; |

party payors.

investigations.

the SEIU or the Hospital Police Association.

In February, 2016, nurses at Corona Regional Medical Center (“Corona”), who were previously represented by the United Nurses Associations of California/Union of Health Care Professionals (“UNAC/UHCP”), submitted to the hospital objective evidence that the union no longer had majority support of the nurses.

The nurses requested that the hospital withdraw recognition of UNAC/UHCP as their bargaining representative.

After verification of the evidence presented, Corona granted the request of the nurses.

UNAC/UHCP has the right to challenge the withdrawal of recognition.

We intend to

Mr. Pember commenced employment with us in August, 2011 and serves as President of our Acute Care Division.

In February, 2013, the Office of Inspector General for the United States Department of Health and Human Services (“OIG”) served a subpoena requesting various documents from January, 2008 to the date of the subpoena directed at Universal Health Services, Inc. (“UHS”) concerning it and UHS of Delaware, Inc., and certain UHS owned behavioral health facilities including: Keys of [removed: Carolina, Old Vineyard Behavioral Health, The Meadows Psychiatric Center, Streamwood Behavioral Health, Hartgrove Hospital, Rock River Academy and Residential Treatment Center, Roxbury Treatment Center, Harbor Point Behavioral Health Center, f/k/a The Pines Residential Treatment Center, including the Crawford, Brighton and Kempsville campuses, Wekiva Springs Center and River Point Behavioral Health.]

In October, 2013, we were advised [removed: by] [added: that] the DOJ’s Criminal Frauds Section [removed: that they received a referral from the DOJ Civil Division and] [added: had] opened an investigation of River Point Behavioral Health and Wekiva Springs Center.

Although the operating results of River Point Behavioral Health did not have a material impact on our consolidated results of operations during the years ended December 31, [removed: 2015] [added: 2016] or [removed: 2014,] [added: 2015,] the payment suspension has had a material adverse effect on the facility’s results of operations and financial condition.

The DOJ has advised us that the civil aspect of the coordinated investigation referenced above is a False [removed: Claim] [added: Claims] Act investigation focused on billings submitted to government payers in relation to services provided at those facilities.

The DOJ [removed: is] [added: was] investigating potential Stark law violations relating to arrangements between the facility and physician(s) at the facility.

These agreements were entered into before we acquired the facility as a part of our acquisition of Ascend [removed: Health Corporation in October, 2012.]

At [removed: present,] [added: this time,] we are uncertain as to potential liability [removed: and/or] [added: or] financial exposure, if any, which may be associated with this matter.

In late September, 2015, many hospitals in Pennsylvania, including seven of our behavioral health care hospitals located in the state, received letters from the Pennsylvania Department of [removed: Public Welfare (“DPW”)] [added: Human Services (the “Department”)] demanding repayment of allegedly excess Medicaid Disproportionate Share Hospital payments (“DSH”) for the federal fiscal year 2011 (“FFY2011”) amounting to approximately $4 million in the aggregate.

We [removed: have] filed administrative appeals for all of our facilities contesting the recoupment efforts [removed: since] [added: for FFYs 2011 and 2012 as] we believe [removed: DPW’s] [added: the Department’s] calculation methodology is inaccurate and conflicts with applicable federal and state laws and regulations.

[removed: DPW] [added: The Department] has agreed to postpone the recoupment of the state’s share of the DSH payments until all hospital appeals are [removed: resolved.][added: resolved but recently started recoupment of the federal share.]

[removed: However, if DPW] [added: If the Department] is ultimately successful in its demand related to [removed: FFY2011,] [added: FFY2011 and FFY2012,] it could take similar action with regards to [removed: FFY2012 through] [added: FFY2013 and] FFY2014.

Due to a change in the Pennsylvania Medicaid State Plan and implementation of a CMS-approved Medicaid Section 1115 Waiver, we do not believe the methodology applied by [removed: DPW] [added: the Department] to FFY2011 [added: and FFY2012] is applicable to reimbursements received for Medicaid services provided after January 1, 2015 by our behavioral health care facilities located in Pennsylvania.

We can provide no assurance that we will ultimately be successful in our legal and administrative appeals related to [removed: DPW’s] [added: the Department’s] repayment demands.

[removed: At] present, we are uncertain as to the focus, scope or extent of the investigation, liability of the facility and/or potential financial exposure, if any, in connection with this matter.

These claims or suits include claims for damages for personal injuries, medical malpractice, commercial/contractual disputes, wrongful restriction of, or interference with, physicians’ staff privileges, and employment related [removed: claims, In addition, health care companies are subject to investigations and/or actions by various state and federal governmental agencies or those bringing claims on their behalf.][added: claims.]

These qui tam lawsuits are placed under seal by the court to comply with [added: the False Claims Act’s requirements.]

Carolina, Old Vineyard Behavioral Health, The Meadows Psychiatric Center, Streamwood Behavioral Health, Hartgrove Hospital, Rock River Academy and Residential Treatment Center, Roxbury Treatment Center, Harbor Point Behavioral Health Center, f/k/a The Pines Residential Treatment Center, including the Crawford, Brighton and Kempsville campuses, Wekiva Springs Center and River Point Behavioral Health.

Health Corporation in October, 2012.

We have reached a settlement with the DOJ, which did not have a material impact on our consolidated financial statements, concluding this matter.

In February, 2017, we were notified that the Department of Justice decided not to intervene in an under seal qui tam case and filed a notice of declination.

Further, we have been informed that the relator is dismissing the case.

Litigation:

U.S. ex rel Escobar v.

Universal Health Services, Inc. et.

al.

This is a False Claims Act case filed against Universal Health Services, Inc., UHS of Delaware, Inc. and HRI Clinics, Inc. d/b/a Arbour Counseling Services in U.S. District Court for the District of Massachusetts.

This qui tam action primarily alleges that Arbour Counseling Services failed to appropriately supervise certain clinical providers in contravention of regulatory requirements and the submission of claims to Medicaid were subsequently improper.

Relators make other claims of improper billing to Medicaid associated with alleged failures of Arbour Counseling to comply with state regulations.

The U.S. Attorney’s Office and the Massachusetts Attorney General’s Office initially declined to intervene.

UHS filed a motion to dismiss and the trial court originally granted the motion dismissing the case.

The First Circuit Court of Appeals (“First Circuit”) reversed the trial court’s dismissal of the case.

The United States Supreme Court subsequently vacated the First Circuit’s opinion and remanded the case for further consideration under the new legal standards established by the Supreme Court for False Claims Act cases.

During the 4th quarter of 2016, the First Circuit issued a revised opinion upholding their reversal of the trial court’s dismissal.

The case was then remanded to the trial court for further proceedings.

In January 2017, the U.S. Attorney’s Office and Massachusetts Attorney General’s Office advised of the potential for intervention in the case.

We are defending this case vigorously.

Heed v.

Universal Health Services, Inc., et al.

In December 2016 a purported shareholder class action lawsuit was filed in U.S. District Court for the Central District of California against UHS, and certain UHS officers alleging violations of the federal securities laws.

Plaintiff alleges that defendants violated federal securities laws relating to the disclosures made in public filings associated with practices at our behavioral health facilities.

Although we have not been served with the complaint at this time, we deny liability and intend to defend ourselves vigorously.

At this time, we are uncertain as to potential liability or financial exposure, if any, which may be associated with this matter.

In September, 2016, we received similar requests for repayment for alleged DSH overpayments for FFY2012.

At

In addition, health care companies are subject to investigations and/or actions by various state and federal governmental agencies or those bringing claims on their behalf.

In August, 2015, we received notification from CMS that, effective September, 2015, the payment suspension will be continued for another 180 days.

Regulatory Matters:

On July 23, 2015, Timberlawn Mental Health System (“Timberlawn”) received notification from CMS of its intent to terminate Timberlawn’s Medicare provider agreement effective August 7, 2015.

This notification resulted from surveys conducted which alleged that Timberlawn was out of compliance with conditions of participation required for participation in the Medicare/Medicaid program.

We filed a request for expedited administrative appeal with the U.S. Department of Health and Human Services, Departmental Appeals Board, Civil Remedies Division, seeking review and reversal of the termination action.

In conjunction with the administrative appeal, we filed litigation in the U.S District Court for the Northern District of Texas seeking a temporary restraining order and preliminary injunction to have the termination stayed pending the conclusion of the administrative appeal.

The trial court denied Timberlawn’s request for a temporary restraining order and dismissed the case.

Timberlawn’s provider agreement was terminated effective August 14, 2015.

In September, 2015 Timberlawn reached an agreement with CMS relative to its reapplication to the Medicare/Medicaid program.

In exchange, Timberlawn agreed to dismiss its administrative appeal as well as not to pursue an appeal of the decision of the trial court.

During this time, Timberlawn has remained open.

In December, 2015, Timberlawn received notice from the Texas Department of State Health Services of its intent to revoke Timberlawn’s license and impose an administrative penalty.

We have appealed and are contesting the proposed revocation and fine.

In January, 2016, Timberlawn submitted its application for re-enrollment into the Medicare/Medicaid program.

Although the operating results of Timberlawn did not have a material impact on our consolidated results of operations or financial condition for the years ended December 31, 2015 or 2014, the termination of Timberlawn’s provider agreement has had a material adverse effect on the facility’s results of operations and financial condition.

During the second quarter of 2015, Texoma Medical Center (“Texoma”), which includes TMC Behavioral Health Center, entered into a Systems Improvement Agreement (“SIA”) with CMS.

The SIA abated a termination action from CMS following surveys which identified alleged failures to comply with conditions of participation primarily involving Texoma’s behavioral health operations.

The terms of the SIA required Texoma to engage independent consultants/experts approved by CMS to analyze and develop implementation plans at Texoma to meet Medicare conditions of participation.

At the conclusion of the SIA, CMS will conduct a full certification survey to determine if Texoma is in substantial compliance with the Medicare conditions of participation.

The term of agreement is set to conclude October 2, 2016 unless the terms of the agreement are fulfilled earlier.

During the term of the SIA, Texoma remains eligible to receive reimbursements from Medicare and Medicaid for services rendered to Medicare and Medicaid beneficiaries.

DPW also extended the deadline to recoup the federal share (2011 federal share is 55%) until April 30, 2016.

the False Claims Act’s requirements.

10-K 1 [removed: uhs-10k_20151231.htm] [added: uhs-10k_20161231.htm] 10-K

| [removed: x] [added: ☒] | ANNUAL REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934 |

For the fiscal year ended December 31, [removed: 2015][added: 2016]

| [removed: o] [added: ☐] | TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934 |

Yes [removed: x] [added: ☒] No [removed: o][added: ☐]

Yes [removed: o] [added: ☐] No [removed: x][added: ☒]

Indicate by check mark if disclosure of delinquent filers pursuant to Item 405 of Regulation S-K is not contained herein, and will not be contained, to the best of registrant’s knowledge, in definitive proxy or information statements incorporated by reference in Part III of this Form 10-K or any amendment to this Form 10-K. [removed: o]

| Large accelerated filer | | [removed: x] [added: ☒] | | Accelerated filer | | [removed: o] [added: ☐] |

| Non-accelerated filer | | [removed: o] [added: ☐] | | Smaller reporting company | | [removed: o] [added: ☐] |

The aggregate market value of voting stock held by non-affiliates at June 30, [removed: 2015] [added: 2016] was [removed: $12.9] [added: $11.9] billion.

The number of shares of the registrant’s Class A Common Stock, $.01 par value, Class B Common Stock, $.01 par value, Class C Common Stock, $.01 par value, and Class D Common Stock, $.01 par value, outstanding as of January 31, [removed: 2016,] [added: 2017,] were 6,595,308; [removed: 90,384,960;] [added: 89,315,389;] 663,940 and [removed: 23,202,] [added: 22,100,] respectively.

Portions of the registrant’s definitive proxy statement for our [removed: 2016] [added: 2017] Annual Meeting of Stockholders, which will be filed with the Securities and Exchange Commission within 120 days after December 31, [removed: 2015] [added: 2016] (incorporated by reference under Part III).

[removed: 2015] [added: 2016] FORM 10-K ANNUAL REPORT

| Item 1A | | [Risk Factors](#ITEM_1A_RISK_FACTORS) | [removed: 11] [added: 12] |

| Item 1B | | [Unresolved Staff Comments](#ITEM_1B_UNRESOLVED_STAFF_COMMENTS) | [removed: 23] [added: 24] |

| Item 2 | | [Properties](#ITEM_2_PROPERTIES) | [removed: 23] [added: 24] |

| Item 3 | | [Legal Proceedings](#ITEM_3_LEGAL_PROCEEDINGS) | [removed: 29] [added: 32] |

| Item 4 | | [Mine Safety Disclosure](#ITEM_4_MINE_SAFETY_DISCLOSURES) | [removed: 32] [added: 36] |

| Item 5 | | [Market for Registrant’s Common Equity, Related Stockholder Matters and Issuer Purchases of Equity Securities](#ITEM_5_MARKET_FOR_REGISTRANTS_COMMON_EQU) | [removed: 33] [added: 37] |

| Item 6 | | [Selected Financial Data](#ITEM_6_SELECTED_FINANCIAL_DATA) | [removed: 36] [added: 40] |

| Item 7 | | [Management’s Discussion and Analysis of Financial Condition and Results of Operations](#ITEM_7_MANAGEMENTS_DISCUSSION_ANALYSIS_F) | [removed: 37] [added: 41] |

| Item 7A | | [Quantitative and Qualitative Disclosures About Market Risk](#ITEM_7A_QUANTITATIVE_QUALITATIVE_DISCLOS) | [removed: 73] [added: 75] |

| Item 8 | | [Financial Statements and Supplementary Data](#ITEM_8_FINANCIAL_STATEMENTS_SUPPLEMENTAR) | [removed: 74] [added: 76] |

| Item 9 | | [Changes in and Disagreements with Accountants on Accounting and Financial Disclosure](#ITEM_9_CHANGES_IN_DISAGREEMENTS_WITH_ACC) | [removed: 74] [added: 77] |

| Item 9A | | [Controls and Procedures](#ITEM_9A_CONTROLS_PROCEDURES) | [removed: 74] [added: 77] |

| Item 9B | | [Other Information](#ITEM_9B_OR_INFORMATION) | [removed: 75] [added: 77] |

| Item 10 | | [Directors, Executive Officers and Corporate Governance](#ITEM_10_DIRECTORS_EXECUTIVE_FICERS_CORPO) | [removed: 76] [added: 78] |

| Item 11 | | [Executive Compensation](#ITEM_11_EXECUTIVE_COMPENSATION) | [removed: 76] [added: 78] |

| Item 12 | | [Security Ownership of Certain Beneficial Owners and Management and Related Stockholder Matters](#ITEM_12_SECURITY_OWNERSHIP_CERTAIN_BENEF) | [removed: 76] [added: 78] |

| Item 13 | | [Certain Relationships and Related Transactions, and Director Independence](#ITEM_13_CERTAIN_RELATIONSHIPS_RELATED_TR) | [removed: 76] [added: 78] |

| Item 14 | | [Principal Accountant Fees and Services](#ITEM_14_PRINCIPAL_ACCOUNTANT_FEES_SERVIC) | [removed: 76] [added: 78] |

| Item 15 | | [Exhibits and Financial Statement Schedules](#ITEM_15_EXHIBITS_FINANCIAL_STATEMENT_SCH) | [removed: 77] [added: 79] |

| [SIGNATURES](#SIGNATURES) | | | [removed: 82] [added: 83] |

This Annual Report on Form 10-K is for the year ended December 31, [removed: 2015.][added: 2016.]

Yes ☒ No ☐

Yes ☒ No ☐

Yes ☐ No ☒

We own [added: various] office buildings in King of Prussia and Wayne, Pennsylvania, Brentwood, Tennessee, Denton, Texas and Reno, Nevada.

| Centennial Hills Hospital Medical Center [removed: (1)] | Las Vegas, Nevada | [removed: 190] [added: 226] | Owned |

| Desert Springs Hospital [removed: (1)] | Las Vegas, Nevada | 293 | Owned |

| Doctors’ Hospital of Laredo [removed: (8)] [added: (7)] | Laredo, Texas | 183 | Owned |

| The George Washington University Hospital [removed: (2)] [added: (1)] | Washington, D.C. | 385 | Owned |

| Henderson Hospital [removed: (1) (10)] | Henderson, Nevada | [removed: 142] [added: 130] | Owned |

| South Texas Health System [removed: (4)] [added: (3)] | | | |

| McAllen Medical Center [removed: (3)] [added: (2)] | McAllen, Texas | 441 | Leased |

| STHS ER at Mission [removed: (3)] | Mission, Texas | — | Leased |

| STHS ER at Weslaco [removed: (3)] | Weslaco, Texas | — | Leased |

| Inland Valley Campus [removed: (3)] [added: (2)] | Wildomar, California | 132 | Leased |

| Spring Valley Hospital Medical Center [removed: (1)] | Las Vegas, Nevada | [removed: 237] [added: 292] | Owned |

| Summerlin Hospital Medical Center [removed: (1)] | Las Vegas, Nevada | 454 | Owned |

| Texoma Medical Center | Denison, Texas | [removed: 266] [added: 326] | Owned |

| Valley Hospital Medical Center [removed: (1)] | Las Vegas, Nevada | 301 | Owned |

| Wellington Regional Medical Center [removed: (3)] [added: (2)] | West Palm Beach, Florida | 233 | Leased |

| Alhambra Hospital | Rosemead, California | [removed: 103] [added: 109] | Owned |

| Arbour-Fuller Hospital | South Attleboro, Massachusetts | [removed: 103] [added: 118] | Owned |

| Bury Hospital | Bury, UK | [removed: 164] [added: 167] | Owned |

| Cedar Grove Residential Treatment Center | Murfreesboro, Tennessee | [removed: 36] [added: 40] | Owned |

| Cedar Hills Hospital [removed: (9)] [added: (8)] | Beaverton, Oregon | 89 | Owned |

| Clarion Psychiatric Center | Clarion, Pennsylvania | [removed: 74] [added: 76] | Owned |

| Columbus Behavioral Center for Children and Adolescents | Columbus, Indiana | [removed: 56] [added: 57] | Owned |

| Cygnet Hospital—Ealing | Ealing, UK | 26 | [removed: Leased] [added: Owned] |

| Cygnet Hospital—Kewstoke | Kewstoke, UK | [removed: 69] [added: 72] | Owned |

| Cygnet [removed: Lodge—Westlands] [added: Lodge – Kenton] | Westlands, UK | 15 | Owned |

| Cygnet Hospital—Wyke | Wyke, UK | [removed: 47] [added: 56] | Owned |

| Dover Behavioral Health | Dover, Delaware | [removed: 80] [added: 88] | Owned |

| Foundations Behavioral Health | Doylestown, Pennsylvania | [removed: 106] [added: 108] | Leased |

| Hampton Behavioral Health Center | Westhampton, New Jersey | [removed: 110] [added: 120] | Owned |

| Hartgrove Hospital | Chicago, Illinois | [removed: 150] [added: 160] | Owned |

| Havenwyck Hospital | Auburn Hills, Michigan | [removed: 251] [added: 243] | Owned |

| KeyStone Center | Wallingford, Pennsylvania | [removed: 146] [added: 153] | Owned |

| Lakeside Behavioral Health System | Memphis, Tennessee | [removed: 319] [added: 345] | Owned |

| Liberty Point Behavioral Health | Stauton, Virginia | [removed: 50] [added: 56] | Owned |

| Lighthouse Care Center of Conway | Conway, South Carolina | [removed: 96] [added: 87] | Owned |

| The Meadows Psychiatric Center | Centre Hall, Pennsylvania | [removed: 107] [added: 117] | Owned |

| Mountain Youth Academy | Mountain City, Tennessee | [removed: 72] [added: 84] | Owned |

| North Spring Behavioral Healthcare | Leesburg, Virginia | [removed: 100] [added: 102] | Leased |

| Palmetto Summerville | Summerville, South Carolina | [removed: 60] [added: 64] | Leased |

| Desert View Hospital | Pahrump, Nevada | 25 | Owned |

| NWTH FED | Amarillo, Texas | — | Owned |

| United States: | | | |

| United States: | | | |

| Cedar Ridge Bethany | Bethany, Oklahoma | 56 | Owned |

| Fairfax Hospital—Monroe | Monroe, Washington | 34 | Leased |

| United States: | | | |

| United States: | | | |

| Skywood Recovery | Brentwood, Tennessee | 100 | Owned |

| United States: | | | |

| --- | --- | --- | --- |

| United Kingdom: | | | |

| Name of Facility | Location | Number of Beds | Real Property Ownership Interest |

| Acer Clinic (9) | Chestherfield, UK | 14 | Owned |

| Amberwood Lodge (9) | Dorset, UK | 9 | Owned |

| Ashfield House (9) | Huddersfield, UK | 6 | Owned |

| Aspen House (9) | South Yorkshire, UK | 20 | Owned |

| Aspen Lodge (9) | Rotherham, UK | 16 | Owned |

| Beacon Lower (9) | Bradford, UK | 8 | Owned |

| Beacon Upper (9) | Bradford, UK | 8 | Owned |

| Beckly House (9) | Halifax, UK | 12 | Owned |

| Broughton House (9) | Lincolnshire, UK | 34 | Owned |

| Broughton Lodge (9) | Cheshire, UK | 20 | Owned |

| Cambian Alders (9) | Gloucester, UK | 20 | Owned |

| Cambian Ansel Clinic (9) | Nottingham, UK | 24 | Owned |

| Cambian Appletree (9) | Durham, UK | 26 | Owned |

| Cambian Beeches (9) | Nottinghamshire, UK | 12 | Owned |

| Cambian Birches (9) | Notts, UK | 6 | Owned |

| Cambian Cedars (9) | Birmingham, UK | 24 | Owned |

| Cambian Churchill (9) | London, UK | 57 | Owned |

| Cambian Conifers (9) | Derby, UK | 7 | Owned |

| Cambian Elms (9) | Birmingham, UK | 10 | Owned |

| Cambian Grange (9) | Nottinghamshire, UK | 8 | Owned |

| Cambian Heathers (9) | West Bromwich, UK | 20 | Owned |

| Cambian Lodge (9) | Nottinghamshire, UK | 8 | Owned |

| Cambian Manor (9) | Central Drive, UK | 20 | Owned |

| Cambian Nightingale (9) | Dorset, UK | 10 | Owned |

| Cambian Oaks (9) | Barnsley, UK | 36 | Owned |

| Cambian Pines (9) | Woodhouse, UK | 7 | Owned |

| Cambian Views (9) | Matlock, UK | 10 | Owned |

| --- | --- |

| | | | |

| NDA Behavioral Health System | Mount Dora, Florida | 132 | Owned |

| Park Grange | Knaphill, UK | 29 | Owned |

| Turning Point Youth Center | St. Johns, Michigan | 60 | Owned |

| (1) | Desert Springs Hospital, Summerlin Hospital Medical Center, Valley Hospital Medical Center, Spring Valley Hospital Medical Center, Centennial Hills Hospital Medical Center and Henderson Hospital (currently being constructed) are owned by limited |

| | liability companies (“LLCs”) in which we hold controlling, majority ownership interests of approximately 72%. The remaining minority ownership interests in these facilities are held by unaffiliated third-parties. All hospitals are managed by us. |

| (10) | Newly constructed facility that is expected to be completed and opened during the fourth quarter of 2016. |

The table below sets forth, for the quarters indicated, the high and low reported closing sales prices per share reported on the New York Stock Exchange for our Class B Common Stock for the years ended December 31, [removed: 2015] [added: 2016] and [removed: 2014:][added: 2015:]

| 1st | | [removed: $121.33-$102.53] [added: $125.33-$101.65] | | [removed: $85.80-$74.35] [added: $121.33-$102.53] |

| 2nd | | [removed: $142.69-$112.96] [added: $138.74-$121.74] | | [removed: $98.75-$74.61] [added: $142.69-$112.96] |

| 3rd | | [removed: $146.24-$121.16] [added: $138.28-$118.82] | | [removed: $114.84-$91.83] [added: $146.24-$121.16] |

| 4th | | [removed: $130.32-$111.73] [added: $128.06-$101.55] | | [removed: $112.32-$97.81] [added: $130.32-$111.73] |

The number of stockholders of record as of January 31, [removed: 2016,] [added: 2017,] were as follows:

| Class B Common | | | [removed: 233] [added: 231] | |

| Class D Common | | | [removed: 108] [added: 105] | |

As reflected below, during the three-month period ended December 31, [removed: 2015, 478,118] [added: 2016, we have repurchased 475,000] shares [removed: ($57.8] [added: at an aggregate cost of $51.8] million [removed: in the aggregate,] [added: ($8.0 million] of which [removed: $14.5 million] was [removed: accrued at December 31, 2015 and] paid in [added: early] January, [removed: 2016) were repurchased] [added: 2017)] pursuant to the terms of our stock repurchase [removed: program and 211,122 shares were repurchased in connection with income tax withholding obligations resulting from the exercise of stock options and the vesting of restricted stock grants.][added: program.]

During the period of October 1, [removed: 2015] [added: 2016] through December 31, [removed: 2015,] [added: 2016,] we repurchased the following shares:

During the two years ending December 31, [removed: 2015,] [added: 2016,] dividends per share were declared and paid as follows:

| First quarter | | $ | .10 | | | $ | [removed: .05] [added: .10] | |

| Second quarter | | $ | .10 | | | $ | [removed: .05] [added: .10] | |

| Total | | $ | .40 | | | $ | [removed: .30] [added: .40] | |

The following graph compares the cumulative total stockholder return on our common stock with the cumulative total return on the stock included in the Standard & Poor’s 500 Index and a Peer Group Index during the five year period ended December 31, [removed: 2015.][added: 2016.]

The graph assumes an investment of $100 made in our common stock and each Index as of January 1, [removed: 2011] [added: 2012] and has been weighted based on market capitalization.

Companies in the peer group, which consist of companies in the S&P 500 Index or S&P MidCap 400 Index [removed: (in which we] are [removed: also included), are] as follows: Community Health Systems, Inc., Health Management Associates, Inc. (included until January, 2014 when it was acquired by Community Health Systems, Inc.), LifePoint Hospitals, Inc., Tenet Healthcare Corporation and HCA Holdings, Inc. (included from March, 2011 at which time the company’s stock began publicly trading).

[removed: ][added: ]

| Company Name / Index | | [removed: 2010 | | | |] 2011 | | | | 2012 | | | | 2013 | | | | 2014 | | | | 2015 | | | [added: | 2016 | | |]

| | | 2016 | | 2015 |

In February, 2016, our Board of Directors authorized a $400 million increase to our stock repurchase program, which increased the aggregate authorization to $800 million from the previous $400 million mentioned above.

In addition, 119,438 shares were repurchased in connection with income tax withholding obligations resulting from the exercise of stock options and the vesting of restricted stock grants.

| October, 2016 | | | — | | | | 1,569 | | | | — | | | N/A | | | — | | | N/A | | | | $ | 194 | | | $ | 337,690 | |

| November, 2016 | | | — | | | | 5,540 | | | | — | | | N/A | | | — | | | N/A | | | | $ | 703 | | | $ | 337,690 | |

| December, 2016 | | | — | | | | 587,329 | | | | — | | | N/A | | | 475,000 | | | $ | 109.05 | | | $ | 51,799 | | | $ | 285,891 | |

| Total October through December | | | — | | | | 594,438 | | | | — | | | N/A | | | 475,000 | | | $ | 120.91 | | | $ | 52,696 | | | | | |

| | | 2016 | | | | 2015 | | |

| Universal Health Services, Inc. | | $ | 100.00 | | | $ | 126.05 | | | $ | 212.47 | | | $ | 291.79 | | | $ | 314.38 | | | $ | 280.81 | |

| S&P 500 Index | | $ | 100.00 | | | $ | 116.00 | | | $ | 153.57 | | | $ | 174.60 | | | $ | 177.01 | | | $ | 198.18 | |

| Peer Group | | $ | 100.00 | | | $ | 157.70 | | | $ | 232.26 | | | $ | 329.14 | | | $ | 275.01 | | | $ | 260.33 | |

| | | 2015 | | 2014 |

| October, 2015 | | | — | | | | 42,452 | | | | — | | | N/A | | | 40,000 | | | $ | 125.67 | | | $ | 5,027 | | | $ | 228,612 | |

| November, 2015 | | | — | | | | 118,194 | | | | — | | | N/A | | | 115,700 | | | $ | 121.96 | | | $ | 14,111 | | | $ | 214,501 | |

| December, 2015 | | | — | | | | 528,594 | | | | — | | | N/A | | | 322,418 | | | $ | 119.95 | | | $ | 38,673 | | | $ | 175,828 | |

| Total October through December | | | — | | | | 689,240 | | | | — | | | N/A | | | 478,118 | | | $ | 120.91 | | | $ | 57,811 | | | | | |

| | | 2015 | | | | 2014 | | |

| Universal Health Services, Inc. | | $ | 100.00 | | | $ | 89.90 | | | $ | 113.32 | | | $ | 191.00 | | | $ | 262.31 | | | $ | 282.62 | |

| S&P 500 Index | | $ | 100.00 | | | $ | 102.11 | | | $ | 118.45 | | | $ | 156.82 | | | $ | 178.29 | | | $ | 180.75 | |

| Peer Group | | $ | 100.00 | | | $ | 71.27 | | | $ | 112.40 | | | $ | 165.54 | | | $ | 234.59 | | | $ | 196.01 | |

| | | [removed: 2015] [added: 2016] | | | | [removed: 2014] [added: 2015] | | | | [removed: 2013] [added: 2014] | | | | [removed: 2012] [added: 2013] | | | | [removed: 2011] [added: 2012] | | |

| Net revenues | | $ | [removed: 9,043,451] [added: 9,766,210] | | | $ | [removed: 8,205,088] [added: 9,043,451] | | | $ | [removed: 7,367,873] [added: 8,205,088] | | | $ | [removed: 7,054,182] [added: 7,367,873] | | | $ | [removed: 6,812,056] [added: 7,054,182] | |

| Income before income taxes | | $ | [removed: 1,145,901] [added: 1,156,358] | | | $ | [removed: 929,667] [added: 1,145,901] | | | $ | [removed: 869,332] [added: 929,667] | | | $ | [removed: 763,663] [added: 869,332] | | | $ | [removed: 696,336] [added: 763,663] | |

| Net income attributable to UHS | | $ | [removed: 680,528] [added: 702,409] | | | $ | [removed: 545,343] [added: 680,528] | | | $ | [removed: 510,733] [added: 545,343] | | | $ | [removed: 443,446] [added: 510,733] | | | $ | [removed: 398,167] [added: 443,446] | |

| Net margin | | | [removed: 7.5] [added: 7.2] | % | | | [removed: 6.6] [added: 7.5] | % | | | [removed: 6.9] [added: 6.6] | % | | | [removed: 6.3] [added: 6.9] | % | | | [removed: 5.8] [added: 6.3] | % |

| Return on average equity | | | [removed: 16.6] [added: 16.0] | % | | | [removed: 15.3] [added: 16.6] | % | | | [removed: 16.8] [added: 15.3] | % | | | [removed: 17.2] [added: 16.8] | % | | | [removed: 18.1] [added: 17.2] | % |

| Cash provided by operating activities | | $ | [removed: 1,020,898] [added: 1,288,474] | | | $ | [removed: 1,035,876] [added: 1,020,898] | | | $ | [removed: 884,241] [added: 1,035,876] | | | $ | [removed: 799,231] [added: 884,241] | | | $ | [removed: 710,683] [added: 799,231] | |

| Capital expenditures, net (1) | | $ | [removed: 379,321] [added: 519,939] | | | $ | [removed: 391,150] [added: 379,321] | | | $ | [removed: 358,493] [added: 391,150] | | | $ | [removed: 363,192] [added: 358,493] | | | $ | [removed: 285,682] [added: 363,192] | |

| Total assets | | $ | [removed: 9,634,113] [added: 10,317,802] | | | $ | [removed: 8,974,443] [added: 9,615,444] | | | $ | [removed: 8,311,723] [added: 8,974,443] | | | $ | [removed: 8,200,843] [added: 8,311,723] | | | $ | [removed: 7,665,245] [added: 8,200,843] | |

| Long-term borrowings | | $ | [removed: 3,387,303] [added: 4,030,230] | | | $ | [removed: 3,210,215] [added: 3,368,634] | | | $ | [removed: 3,209,762] [added: 3,210,215] | | | $ | [removed: 3,727,431] [added: 3,209,762] | | | $ | [removed: 3,651,428] [added: 3,727,431] | |

| UHS’s common stockholders’ equity | | $ | [removed: 4,249,647] [added: 4,533,220] | | | $ | [removed: 3,735,946] [added: 4,249,647] | | | $ | [removed: 3,249,979] [added: 3,735,946] | | | $ | [removed: 2,713,345] [added: 3,249,979] | | | $ | [removed: 2,296,352] [added: 2,713,345] | |

| Percentage of total debt to total capitalization | | | [removed: 45] [added: 48] | % | | | [removed: 47] [added: 45] | % | | | [removed: 51] [added: 47] | % | | | [removed: 58] [added: 51] | % | | | [removed: 61] [added: 58] | % |

| Average licensed beds | | | [removed: 5,832] [added: 5,934] | | | | [removed: 5,776] [added: 5,832] | | | | [removed: 5,652] [added: 5,776] | | | | [removed: 5,563] [added: 5,652] | | | | [removed: 5,567] [added: 5,563] | |

| Average available beds | | | [removed: 5,656] [added: 5,759] | | | | [removed: 5,571] [added: 5,656] | | | | [removed: 5,429] [added: 5,571] | | | | [removed: 5,338] [added: 5,429] | | | | [removed: 5,265] [added: 5,338] | |

| Inpatient admissions | | | [removed: 261,727] [added: 274,074] | | | | [removed: 251,165] [added: 261,727] | | | | [removed: 246,160] [added: 251,165] | | | | [removed: 245,234] [added: 246,160] | | | | [removed: 250,278] [added: 245,234] | |

| Average length of patient stay | | | [removed: 4.7] [added: 4.6] | | | | [removed: 4.6] [added: 4.7] | | | | [removed: 4.5] [added: 4.6] | | | | 4.5 | | | | 4.5 | |

| Patient days | | | [removed: 1,218,991] [added: 1,251,511] | | | | [removed: 1,167,726] [added: 1,218,969] | | | | [removed: 1,112,541] [added: 1,167,726] | | | | [removed: 1,095,790] [added: 1,112,541] | | | | [removed: 1,114,807] [added: 1,095,790] | |

| Occupancy rate for licensed beds | | | [removed: 57] [added: 58] | % | | | [removed: 55] [added: 57] | % | | | [removed: 54] [added: 55] | % | | | 54 | % | | | [removed: 55] [added: 54] | % |

| Occupancy rate for available beds | | | 59 | % | | | [removed: 57] [added: 59] | % | | | [removed: 56] [added: 57] | % | | | 56 | % | | | [removed: 58] [added: 56] | % |

| Average licensed beds | | | [removed: 21,202] [added: 21,829] | | | | [removed: 20,231] [added: 21,202] | | | | [removed: 19,940] [added: 20,231] | | | | [removed: 19,258] [added: 19,940] | | | | [removed: 19,178] [added: 19,258] | |

| Average available beds | | | [removed: 21,116] [added: 21,744] | | | | [removed: 20,131] [added: 21,116] | | | | [removed: 19,841] [added: 20,131] | | | | [removed: 19,178] [added: 19,841] | | | | [removed: 19,160] [added: 19,178] | |

| Inpatient admissions | | | [removed: 447,007] [added: 456,052] | | | | [removed: 426,510] [added: 447,007] | | | | [removed: 401,565] [added: 426,510] | | | | [removed: 373,437] [added: 401,565] | | | | [removed: 351,086] [added: 373,437] | |

| Average length of patient stay | | | [removed: 13.1] [added: 13.2] | | | | [removed: 12.9] [added: 13.1] | | | | [removed: 13.3] [added: 12.9] | | | | [removed: 14.0] [added: 13.3] | | | | [removed: 14.6] [added: 14.0] | |

| Patient days | | | [removed: 5,835,134] [added: 6,004,066] | | | | [removed: 5,518,660] [added: 5,835,134] | | | | [removed: 5,354,334] [added: 5,518,660] | | | | [removed: 5,212,800] [added: 5,354,334] | | | | [removed: 5,130,245] [added: 5,212,800] | |

| Occupancy rate for licensed beds | | | 75 | % | | | 75 | % | | | [removed: 74] [added: 75] | % | | | 74 | % | | | [removed: 73] [added: 74] | % |

| Occupancy rate for available beds | | | [removed: 76] [added: 75] | % | | | [removed: 75] [added: 76] | % | | | [removed: 74] [added: 75] | % | | | 74 | % | | | [removed: 73] [added: 74] | % |

| Net income attributable to UHS—basic | | $ | [removed: 6.89] [added: 7.22] | | | $ | [removed: 5.52] [added: 6.89] | | | $ | [removed: 5.21] [added: 5.52] | | | $ | [removed: 4.57] [added: 5.21] | | | $ | [removed: 4.09] [added: 4.57] | |

| Net income attributable to UHS—diluted | | $ | [removed: 6.76] [added: 7.14] | | | $ | [removed: 5.42] [added: 6.76] | | | $ | [removed: 5.14] [added: 5.42] | | | $ | [removed: 4.53] [added: 5.14] | | | $ | [removed: 4.04] [added: 4.53] | |

| Dividends declared | | $ | 0.40 | | | $ | [removed: 0.30] [added: 0.40] | | | $ | [removed: 0.20] [added: 0.30] | | | $ | [removed: 0.60] [added: 0.20] | | | $ | [removed: 0.20] [added: 0.60] | |

| Weighted average number of shares outstanding—basic | | | [removed: 98,797] [added: 97,208] | | | | [removed: 98,826] [added: 98,797] | | | | [removed: 98,033] [added: 98,826] | | | | [removed: 96,821] [added: 98,033] | | | | [removed: 97,199] [added: 96,821] | |

| Weighted average number of shares and share equivalents outstanding—diluted | | | [removed: 100,694] [added: 98,380] | | | | [removed: 100,544] [added: 100,694] | | | | [removed: 99,361] [added: 100,544] | | | | [removed: 97,711] [added: 99,361] | | | | [removed: 98,537] [added: 97,711] | |

As of December 31, [removed: 2015,] [added: 2016,] under the supervision and with the participation of our management, including our Chief Executive Officer (“CEO”) and Chief Financial Officer (“CFO”), we performed an evaluation of the effectiveness of our disclosure controls and procedures as defined in Rule 13a-15(e) or Rule 15d-15(e) of the Securities Exchange Act of 1934, as amended.

There have been no changes in our internal control over financial reporting or in other factors during the fourth quarter of [removed: 2015] [added: 2016] that have materially affected, or are reasonably likely to materially affect, our internal control over financial reporting.

Based on its assessment, management has concluded that we maintained effective internal control over financial reporting as of December 31, [removed: 2015,] [added: 2016,] based on criteria in Internal Control—Integrated Framework (2013), issued by the COSO.

The effectiveness of the Company’s internal control over financial reporting as of December 31, [removed: 2015] [added: 2016] has been audited by PricewaterhouseCoopers LLP, an independent registered public accounting firm as stated in its report which appears herein.

We have excluded our 2016 acquisition of Cambian Group, PLC’s adult services division from the assessment of internal control over financial reporting as of December 31, 2016 because it was acquired by us in a purchase business combination in late December, 2016.

The acquisition of the Cambian Group, PLC’s adult services division had no impact on our consolidated net revenues for the year ended December 31, 2016, and, excluding property & equipment, goodwill and intangible and other assets, represented 0.4% of our consolidated total assets as of December 31, 2016.

We have excluded the acquisitions made during 2015, including the facilities acquired as part of our acquisition of Foundations Recovery Network, LLC and Alpha Hospitals Holdings Limited, from the assessment of internal control over financial reporting as of December 31, 2015 because they were acquired by us in purchase business combinations at various times during 2015.

These facilities/businesses represented approximately 1% of our consolidated total assets and our consolidated net revenues as of, and for the year ended, December 31, 2015.

There is hereby incorporated by reference the information to appear under the captions “Election of Directors”, “Section 16(a) Beneficial Ownership Reporting Compliance” and “Corporate Governance” in our Proxy Statement, to be filed with the Securities and Exchange Commission within 120 days after December 31, [removed: 2015.][added: 2016.]

There is hereby incorporated by reference the information to appear under the caption “Executive Compensation” in our Proxy Statement to be filed with the Securities and Exchange Commission within 120 days after December 31, [removed: 2015.][added: 2016.]

There is hereby incorporated by reference the information to appear under the caption “Security Ownership of Certain Beneficial Owners and Management” and “Executive Compensation” in our Proxy Statement, to be filed with the Securities and Exchange Commission within 120 days after December 31, [removed: 2015.][added: 2016.]

There is hereby incorporated by reference the information to appear under the captions “Certain Relationships and Related Transactions” and “Corporate Governance” in our Proxy Statement, to be filed with the Securities and Exchange Commission within 120 days after December 31, [removed: 2015.][added: 2016.]

There is hereby incorporated by reference the information to appear under the caption “Relationship with Independent Auditors” in our Proxy Statement, to be filed with the Securities and Exchange Commission within 120 days after December 31, [removed: 2015.][added: 2016.]

[removed: 4.1 Form of Indenture dated January 20, 2000, between] [added: 10.11*] Universal Health Services, Inc. [removed: and J.P. Morgan Trust Company, National Association (as successor to Bank One Trust Company, N.A.), Trustee] [added: Employee Stock Purchase Plan,] previously filed as Exhibit 4.1 to the Company’s Registration Statement on Form [removed: S-3/A] [added: S-8] (File No. [removed: 333-85781),] [added: 333-122188),] dated [removed: February 1, 2000,] [added: January 21, 2005] is incorporated herein by reference.

[removed: 4.4] [added: 10.13*] Form of [removed: 7.125% Notes due 2016,] [added: Stock Option Agreement,] previously filed as Exhibit [removed: 4.1] [added: 10.4] to the Company’s Current Report on Form [removed: 8-K] [added: 8-K,] dated June [removed: 30, 2006,] [added: 8, 2005,] is incorporated herein by reference.

[removed: 4.6 Form] [added: 10.23 Assignment and Assumption Agreement, dated as] of [removed: Note,] [added: October 27, 2010,] previously filed as Exhibit [removed: 4.1] [added: 10.3] to the Company’s Current Report on Form 8-K dated [removed: May 30, 2008,] [added: November 2, 2010,] is incorporated herein by reference.

[removed: 4.7 Officers’ Certificate,] [added: 10.18 Omnibus Amendment to Receivables Sale Agreements, dated as of October 27, 2010,] previously filed as Exhibit [removed: 4.2] [added: 10.1] to the Company’s Current Report on Form 8-K dated [removed: May 30, 2008,] [added: November 2, 2010,] is incorporated herein by reference.

[removed: 4.8] [added: 4.1] Indenture, dated as of August 7, 2014, among Universal Health Services, Inc., its subsidiaries specified therein, MUFG Union Bank, N.A., as Trustee, JPMorgan Chase Bank, N.A., as Collateral Agent (including forms of the 3.750% Senior Secured Notes due 2019 and the 4.750% Senior Secured Notes due 2022), previously filed as Exhibit 4.1 to the Company’s Current Report on Form 8-K dated August 12, 2014, is incorporated herein by reference.

[removed: 4.9 Second Supplement] [added: 4.3] Indenture, dated as of [removed: November 15, 2010, to the Indenture, dated January 20, 2000,] [added: June 3, 2016,] between [removed: Universal Health Services, Inc. and] the [removed: Bank of New York Mellon Trust company,] [added: Company, the subsidiary guarantors party thereto, MUFG Union Bank,] N.A., as [removed: Trustee,] [added: trustee, and JPMorgan Chase Bank, N.A., as collateral agent,] previously filed as Exhibit 4.2 to the Company’s Current Report on Form 8-K dated [removed: November 17, 2010,] [added: June 8, 2016,] is incorporated herein by reference.

[removed: 4.10 Third] [added: 4.2] Supplemental Indenture, dated as of [removed: August 7, 2014,] [added: June 3, 2016,] to Indenture, dated as of [removed: January 20, 2000, between Universal Health Services, Inc.] [added: August 7, 2014, by] and [removed: The Bank of New York Mellon Trust] [added: among the] Company, [added: the subsidiary guarantors party thereto, MUFG Union Bank,] N.A., as [removed: Trustee,] [added: trustee, and JPMorgan Chase Bank, N.A., as collateral agent,] previously filed as Exhibit [removed: 10.3] [added: 4.1] to the Company’s Current Report on Form 8-K dated [removed: August 12, 2014,] [added: June 8, 2016,] is incorporated herein by reference.

10.3 Agreement, dated December [removed: 4, 2015,] [added: 1, 2016,] to renew Advisory Agreement, dated as of December 24, 1986, between Universal Health Realty Income Trust and UHS of Delaware, Inc.

[removed: 10.10 Valley/Desert Contribution Agreement dated January 30, 1998, by and among Valley Hospital Medical Center, Inc.] [added: 10.10* Amended] and [removed: NC-DSH,] [added: Restated Universal Health Services,] Inc. [added: Supplemental Deferred Compensation Plan dated as of January 1, 2002,] previously filed as Exhibit [removed: 10.30] [added: 10.29] to the Company’s Annual Report on Form 10-K for the year ended December 31, [removed: 1997,] [added: 2002,] is incorporated herein by reference.

[removed: 10.12* Amended and Restated] [added: 10.15 Amendment No. 1 to the Master Lease Document, between certain subsidiaries of] Universal Health Services, Inc. [removed: Supplemental Deferred Compensation Plan] [added: and Universal Health Realty Income Trust,] dated [removed: as of January 1, 2002,] [added: April 24, 2006,] previously filed as Exhibit 10.29 to the Company’s Annual Report on Form 10-K for the year ended December 31, [removed: 2002,] [added: 2006,] is incorporated herein by reference.

[removed: 10.13*] [added: 10.12*] Universal Health Services, Inc. [removed: Employee] [added: Third Amended and Restated 2005] Stock [removed: Purchase] [added: Incentive] Plan, previously filed as Exhibit [removed: 4.1] [added: 10.1] to the Company’s [removed: Registration Statement] [added: Quarterly Report] on Form [removed: S-8 (File No. 333-122188), dated January 21, 2005] [added: 10-Q filed on August 7, 2015,] is incorporated herein by reference.

[removed: 10.14*] [added: 10.16* Amended and Restated] Universal Health Services, Inc. [removed: Third Amended and Restated 2005] [added: 2010 Employees’ Restricted] Stock [removed: Incentive] [added: Purchase] Plan, previously filed as Exhibit [removed: 10.1] [added: 10.2] to the Company’s Quarterly Report on Form 10-Q filed on August 7, 2015, is incorporated herein by [removed: reference.][added: reference]

[removed: 10.15*] [added: 10.14*] Form of Stock Option [removed: Agreement,] [added: Agreement for Non-Employee Directors,] previously filed as Exhibit [removed: 10.4] [added: 10.2] to the Company’s Current Report on Form 8-K, dated [removed: June 8,] [added: October 3,] 2005, is incorporated herein by reference.

[removed: 10.16* Form] [added: 10.19 Amended and Restated Credit and Security Agreement, dated as] of [removed: Stock Option Agreement for Non-Employee Directors,] [added: October 27, 2010,] previously filed as Exhibit 10.2 to the Company’s Current Report on Form [removed: 8-K,] [added: 8-K] dated [removed: October 3, 2005,] [added: November 2, 2010,] is incorporated herein by reference.

[removed: 10.18* Amended and Restated] [added: 10.17*] Universal Health Services, Inc. 2010 [removed: Employees’ Restricted Stock Purchase] [added: Executive Incentive] Plan, previously filed as Exhibit [removed: 10.2] [added: 10.3] to the Company’s Quarterly Report on Form 10-Q filed on August 7, 2015, is incorporated herein by [removed: reference][added: reference.]

10.20 [removed: Omnibus] [added: Second] Amendment to [removed: Receivables Sale Agreements,] [added: Amended and Restated Credit and Security Agreement,] dated as of October [removed: 27, 2010,] [added: 25, 2013,] previously filed as Exhibit 10.1 to the Company’s Current Report on Form 8-K dated [removed: November 2, 2010,] [added: October 30, 2013,] is incorporated herein by reference.

10.21 [added: Third Amendment to] Amended and Restated Credit and Security Agreement, dated as of [removed: October 27, 2010,] [added: August 1, 2014,] previously filed as Exhibit [removed: 10.2] [added: 10.1] to the Company’s Current Report on Form 8-K dated [removed: November 2, 2010,] [added: August 4, 2014,] is incorporated herein by reference.

10.22 [removed: Second] [added: Fourth] Amendment to Amended and Restated Credit and Security Agreement, dated as of [removed: October 25, 2013,] [added: December 22, 2015,] previously filed as Exhibit 10.1 to the Company’s Current Report on Form 8-K dated [removed: October 30, 2013,] [added: December 22, 2015,] is incorporated herein by [removed: reference.][added: reference]

[removed: 10.23 Third Amendment] [added: 10.29 Fourth Amendment, dated as of August 7, 2014,] to [removed: Amended and Restated] [added: the] Credit [removed: and Security] Agreement, dated as of [removed: August 1, 2014,] [added: November 15, 2010, as] previously [added: amended from time to time, by and among Universal Health Services, Inc., the several banks and other financial institutions from time to time parties thereto, JPMorgan Chase Bank, N.A., as administrative agent and the other agents party thereto, previously] filed as Exhibit 10.1 to the Company’s Current Report on Form 8-K dated August [removed: 4,] [added: 12,] 2014, is incorporated herein by reference.

[removed: 10.25] [added: 10.24] Credit Agreement, dated as of November 15, 2010, by and among Universal Health Services, Inc., JPMorgan Chase Bank, N.A. and the various financial institutions as are or may become parties thereto, as Lenders, SunTrust Bank, The Royal Bank of Scotland, Plc, Bank of Tokyo-Mitsubishi UFJ Trust Company and Credit Agricole Corporate and Investment Bank, as co-documentation agents, Deutsche Bank Securities Inc. and Bank of America N.A. as co-syndication agents, and JPMorgan Chase Bank, N.A., as administrative agent for the Lenders and as collateral agent for the secured parties, previously filed as Exhibit 10.1 to the Company’s Current Report on Form 8-K dated November 17, 2010, is incorporated herein by reference.

[removed: 10.26] [added: 10.25] First Amendment, dated as of March 15, 2011, to the Credit Agreement, dated as of November 15, 2010, by and among Universal Health Services, Inc., JPMorgan Chase Bank, N.A. and the various financial institutions as are or may become parties thereto, as Lenders, certain banks as co-documentation agents, and as co-syndication agents, and JPMorgan Chase Bank, N.A., as administrative agent for the Lenders and as collateral agent for the secured parties, previously filed as Exhibit 10.1 to the Company’s Current Report on Form 8-K dated March 15, 2011, is incorporated herein by reference.